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Incorporating Standards via DEA

In: Data Envelopment Analysis: Theory, Methodology, and Applications

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  • Boaz Golany
  • Yaakov Roll

Abstract

The engineering approach to efficiency measurement is based on the notion of “standards”. In that approach, specific standards are generated for the required input per each kind of output. To this end, traditional techniques of industrial engineering, involving synthetic and statistical approaches, are employed. Thus, these standards are not necessarily observed from the real operations of the units, and in some cases they reflect normative managerial perceptions or targets. The standards are used to determine both optimal output levels and the corresponding minimal inputs. Partial efficiencies are then obtained from the ratios of standard inputs to actual ones, for a given output mix. These partial efficiency figures may be combined into an aggregate efficiency measure, indicating the overall efficiency of the said unit across all the dimensions of its activity (see, e.g., Roll and Sachish, 1981).

Suggested Citation

  • Boaz Golany & Yaakov Roll, 1994. "Incorporating Standards via DEA," Springer Books, in: Data Envelopment Analysis: Theory, Methodology, and Applications, chapter 16, pages 313-328, Springer.
    • Handle: RePEc:spr:sprchp:978-94-011-0637-5_16
    DOI: 10.1007/978-94-011-0637-5_16
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