In this paper an attempt is made to explain the basic concept of efficiency, frontier production function, technical efficiency, deterministic frontier, and stochastic frontier. Efficiency of a firm/industry refers to its performance in the utilization of resources at its disposal and is a relative concept. Technical efficiency of a production function is defined as the maximum quantity of outp...

We study the Pareto frontier for two competing norms ‖ · ‖X and ‖ · ‖Y on a vector space. For a given vector c, the Pareto frontier describes the possible values of (‖a‖X , ‖b‖Y ) for a decomposition c = a + b. The singular value decomposition of a matrix is closely related to the Pareto frontier for the spectral and nuclear norm. We will develop a general theory that extends the notion of sing...

Background & Aims: Hospitals are the most important centers that provide health services in the country. They have to use scientific and efficient management at all levels for promoting health. Intensive care units (ICU) are one of the most sensitive parts of the hospitals; therefore, paying attention to its efficiency is of particular importance. The purpose of this paper was to estimate the t...

Electricity distribution network is a prime example of a natural local monopoly. In many countries, electricity distribution firms are regulated by the government. In Finland, the regulator estimates the efficient cost frontier using the data envelopment analysis (DEA) and stochastic frontier analysis (SFA) methods. This paper reports the main results of the research project commissioned by the...

We construct a model where the equilibrium organization of firms changes as an economy approaches the world technology frontier. In vertically integrated firms, owners (managers) have to spend time both on production and innovation activities, and this creates managerial overload, and discourages innovation. Outsourcing of some production activities mitigates the managerial overload, but create...

in this paper, linear data envelopment analysis models are used to estimate markowitz efficient frontier. conventional dea models assume non-negative values for inputs and outputs. however, variance is the only variable in these models that takes non-negative values. therefore, negative data models which the risk of the assets had been used as an input and expected return was the output are uti...

Value-at-Risk (VaR) is one of the most widely accepted risk measures in the financial and insurance industries, yet efficient optimization of VaR remains a very difficult problem. We propose a computationally tractable approximation method for minimizing the VaR of a portfolio based on robust optimization techniques. The method results in the optimization of a modified VaR measure, Asymmetry-Ro...

One of the existing DEAmethods’ limitations noted in the literature lies in the process of benchmarking of reference targets for inefficient DMUs. Difficulties arising in this process can be summarized to three aspects. First, the reference target might be a hypothetical DMU that does not actually exist (it is difficult and indeed unrealistic to learn from such a DMU). Second, the reference set...