data envelopment analysis data envelopment analysis

The operational practices (a combination of the management and engineering knowledge) that determine how a DMU’s inputs are transformed into outputs.

An efficiency measure that ignores the impact of scale-size by comparing a DMU only to other units of similar scale. Technical efficiency is computed using the BCC model. Overall efficiency is sometimes referred to as technical efficiency as closely follows the concept of technical efficiency developed by Farrell (1957), which technical efficiency as defined here, …

Continue reading

The input and output values that would render an inefficient unit relatively efficient. Thanassoulis and Dyson (1992) examine ways of modifying the DEA model so as to set priorities over which targets should be improved. [Thanassoulis E and Dyson R G (1992) ‘Estimating preferred target input-output levels using data envelopment analysis’, J. of Opi. Res., …

Continue reading

The additional improvement (increase in outputs and/or decrease in inputs) needed for a unit to become efficient.

The so-called ‘size’ of the DMU, it may be associated with either the inputs or the outputs, depending on the situation.

A unit is said to be scale efficient when its size of operations is optimal so that any modifications on its size will render the unit less efficient. The value for scale efficiency is obtained by dividing the aggregate efficiency by the technical efficiency.

Any unit that is part of a reference set

The set of efficient units from which an inefficient unit’s inefficiency has been determined. Originally, the term was used to denote the set of all units in the analysis (i.e. the field) and the set of efficient units was known as a reference subset, a term still used by some.

The CCR and BCC models both define efficiency as a ratio of weighted outputs over weighted inputs, hence they are often known as ratio models.

Both ratio models rely on a radial or proportional measure as a DMU’s efficiency score depends on its proportional distance to the efficiency frontier