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Centralized resource allocation BCC models

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  • Asmild, Mette
  • Paradi, Joseph C.
  • Pastor, Jesus T.

Abstract

In two recent papers, Lozano and Villa [Centralized resource allocation using data envelopment analysis. Journal of Productivity Analysis 2004;22:143-61. [1]] and Lozano et al. [Centralized target setting for regional recycling operations using DEA. OMEGA 2004;32:101-10. [2]] introduce the concept of "centralized" data envelopment analysis (DEA) models, which aim at optimizing the combined resource consumption by all units in an organization rather than considering the consumption by each unit separately. This is particularly relevant for situations where some variables are controlled by a central authority (e.g. Head Office) rather than individual unit managers. In this paper we reconsider one of the centralized models proposed by the above-mentioned authors and suggest modifying it to only consider adjustments of previously inefficient units. We show how this new model formulation relate to a standard DEA model, namely as the analysis of the mean inefficient point. We also provide a procedure that can be used to generate alternative optimal solutions, enabling a decision maker to search through alternate solution possibilities in order to select the preferred one. We then extend the model to incorporate non-transferable as well as strictly non-discretionary variables and illustrate the models using an empirical example of a public service organization.

Suggested Citation

  • Asmild, Mette & Paradi, Joseph C. & Pastor, Jesus T., 2009. "Centralized resource allocation BCC models," Omega, Elsevier, vol. 37(1), pages 40-49, February.
  • Handle: RePEc:eee:jomega:v:37:y:2009:i:1:p:40-49
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    References listed on IDEAS

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    1. Sebastián Lozano & Gabriel Villa, 2004. "Centralized Resource Allocation Using Data Envelopment Analysis," Journal of Productivity Analysis, Springer, vol. 22(1), pages 143-161, July.
    2. Charnes, A. & Cooper, W. W. & Golany, B. & Seiford, L. & Stutz, J., 1985. "Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 91-107.
    3. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    4. Lozano, S. & Villa, G. & Adenso-Díaz, B., 2004. "Centralised target setting for regional recycling operations using DEA," Omega, Elsevier, vol. 32(2), pages 101-110, April.
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