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A note on efficiency decomposition in two-stage data envelopment analysis

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  • Liu, Shiang-Tai

Abstract

Data envelopment analysis (DEA) is a useful tool of efficiency measurement for firms and organizations. Kao and Hwang (2008) take into account the series relationship of the two sub-processes in a two-stage production process, and the overall efficiency of the whole process is the product of the efficiencies of the two sub-processes. To find the largest efficiency of one sub-process while maintaining the maximum overall efficiency of the whole process, Kao and Hwang (2008) propose a solution procedure to accomplish this purpose. Nevertheless, one needs to know the overall efficiency of the whole process before calculating the sub-process efficiency. In this note, we propose a method that is able to find the sub-process and overall efficiencies simultaneously.

Suggested Citation

  • Liu, Shiang-Tai, 2011. "A note on efficiency decomposition in two-stage data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 212(3), pages 606-608, August.
    • Handle: RePEc:eee:ejores:v:212:y:2011:i:3:p:606-608
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    References listed on IDEAS

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    1. Chen, Yao & Cook, Wade D. & Li, Ning & Zhu, Joe, 2009. "Additive efficiency decomposition in two-stage DEA," European Journal of Operational Research, Elsevier, vol. 196(3), pages 1170-1176, August.
    2. Kao, Chiang & Hwang, Shiuh-Nan, 2008. "Efficiency decomposition in two-stage data envelopment analysis: An application to non-life insurance companies in Taiwan," European Journal of Operational Research, Elsevier, vol. 185(1), pages 418-429, February.
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    Cited by:

    1. Kao, Chiang, 2014. "Network data envelopment analysis: A review," European Journal of Operational Research, Elsevier, vol. 239(1), pages 1-16.
    2. Qingxian An & Fanyong Meng & Sheng Ang & Xiaohong Chen, 2018. "A new approach for fair efficiency decomposition in two-stage structure system," Operational Research, Springer, vol. 18(1), pages 257-272, April.
    3. Sarah J.-Sharahi & Kaveh Khalili-Damghani & Amir-Reza Abtahi & Alireza Rashidi Komijan, 2021. "A new network data envelopment analysis models to measure the efficiency of natural gas supply chain," Operational Research, Springer, vol. 21(3), pages 1461-1486, September.

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