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Data envelopment analysis cross-efficiency method of non-homogeneous decision-making units

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  • Lei Chen
  • Ying-Ming Wang

Abstract

Faced with a large number of the efficiency evaluation problems with non-homogeneous decision-making units (DMUs) in reality, the existing efficiency evaluation methods are always unfair in terms of evaluation perspective and inputs/outputs allocation. Therefore, this paper adopts the concept of network data envelopment analysis (DEA) to define the inclusion relationship of production structure between non-homogeneous DMUs. Sequentially, the DEA cross-efficiency model and its corresponding cross-evaluation strategy are constructed by combining the self-evaluation perspective with peer-evaluation perspective, and then the efficiency of these DMUs can be evaluated in a more objective and reasonable way. Actually, the cross-evaluation perspective can fully reflect the effect of non-homogeneous structure on efficiency. In addition, the inclusion relationship is extended to a mixed relationship, and the application scope of the new cross-efficiency method is thus further expended. Finally, two examples are provided to illustrate the effectiveness of the new method.

Suggested Citation

  • Lei Chen & Ying-Ming Wang, 2023. "Data envelopment analysis cross-efficiency method of non-homogeneous decision-making units," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 74(4), pages 1118-1132, April.
    • Handle: RePEc:taf:tjorxx:v:74:y:2023:i:4:p:1118-1132
    DOI: 10.1080/01605682.2022.2056535
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