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Efficiency evaluation in data envelopment analysis using strong defining hyperplanes

Author

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  • Andreas Dellnitz

    (FernUniversität in Hagen Department of Operations Research)

  • Elmar Reucher

    (Private Hochschule für Wirtschaft und Technik)

  • Andreas Kleine

    (FernUniversität in Hagen)

Abstract

Cross-efficiency analysis in DEA generally uses a two-stage procedure: first, optimize a DMU’s individual efficiency score; next, push the efficiencies of all DMUs in a desired direction. In order to reduce subjective judgement in the second step, we provide a cross-efficiency method using only strong defining hyperplanes of the underlying technology. We develop a new DEA-based algorithm, and prove its finiteness and correctness. To reduce the computational burden, we show how one can combine the procedure with a known beneath-and-beyond procedure. Numerical investigations—comprising real-world data—demonstrate the superiority of the new method.

Suggested Citation

  • Andreas Dellnitz & Elmar Reucher & Andreas Kleine, 2021. "Efficiency evaluation in data envelopment analysis using strong defining hyperplanes," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 43(2), pages 441-465, June.
    • Handle: RePEc:spr:orspec:v:43:y:2021:i:2:d:10.1007_s00291-021-00623-2
    DOI: 10.1007/s00291-021-00623-2
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