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The “weak-link” approach to network DEA for two-stage processes

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  • Despotis, Dimitris K.
  • Koronakos, Gregory
  • Sotiros, Dimitris

Abstract

We introduce in this paper a new definition for the overall system efficiency in network DEA, which is inspired by the “weak link” notion in supply chains and the maximum-flow/minimum- cut problem in networks. We use a two-phase max-min optimization technique in a multi-objective programming framework to estimate the individual stage efficiencies and the overall system efficiency in two-stage processes of varying complexity. This enables us to estimate unique and unbiased efficiency scores and, if required, to drive the efficiency assessments effectively in line with specific priorities given to the stages. A comparison with the multiplicative decomposition approach on data drawn from the literature brings into light the advantages of our method.

Suggested Citation

  • Despotis, Dimitris K. & Koronakos, Gregory & Sotiros, Dimitris, 2016. "The “weak-link” approach to network DEA for two-stage processes," European Journal of Operational Research, Elsevier, vol. 254(2), pages 481-492.
    • Handle: RePEc:eee:ejores:v:254:y:2016:i:2:p:481-492
    DOI: 10.1016/j.ejor.2016.03.028
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    References listed on IDEAS

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    Cited by:

    1. Tatiana Bencova & Andrea Bohacikova, 2022. "DEA in Performance Measurement of Two-Stage Processes: Comparative Overview of the Literature," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 111-129.
    2. Jin, Baoling & Han, Ying & Kou, Po, 2023. "Dynamically evaluating the comprehensive efficiency of technological innovation and low-carbon economy in China's industrial sectors," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    3. Kao, Chiang, 2017. "Efficiency measurement and frontier projection identification for general two-stage systems in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 261(2), pages 679-689.
    4. Sotiros, Dimitris & Koronakos, Gregory & Despotis, Dimitris K., 2019. "Dominance at the divisional efficiencies level in network DEA: The case of two-stage processes," Omega, Elsevier, vol. 85(C), pages 144-155.
    5. Koronakos, Gregory & Sotiros, Dimitris & Despotis, Dimitris K., 2019. "Reformulation of Network Data Envelopment Analysis models using a common modelling framework," European Journal of Operational Research, Elsevier, vol. 278(2), pages 472-480.
    6. Guo, Chuanyin & Abbasi Shureshjani, Roohollah & Foroughi, Ali Asghar & Zhu, Joe, 2017. "Decomposition weights and overall efficiency in two-stage additive network DEA," European Journal of Operational Research, Elsevier, vol. 257(3), pages 896-906.
    7. Koronakos, Gregory & Sotiros, Dimitris & Despotis, Dimitris K. & Kritikos, Manolis N., 2022. "Fair efficiency decomposition in network DEA: A compromise programming approach," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    8. Mahmoudabadi, Mohammad Zarei & Azar, Adel & Emrouznejad, Ali, 2018. "A novel multilevel network slacks-based measure with an application in electric utility companies," Energy, Elsevier, vol. 158(C), pages 1120-1129.
    9. Chen, Kun & Zhu, Joe, 2020. "Additive slacks-based measure: Computational strategy and extension to network DEA," Omega, Elsevier, vol. 91(C).

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