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Convex cone – Conical hull

A convex cone has its vertex as its origin and includes all nonnegtive linear combinations of its points. The envelopment surface obtained from the CCR model has the shape of a convex cone. If the situation in Figure 1 were drawn 3-dimensionally, the efficiency frontier would consist of a set of interlaced facets formed by hyperplanes emanating from the origin and forming a conical structure. The efficient units would lie on top of the facets, while the inefficient ones would be covered under the cone. For a clear visual representation, refer to Ah and Seiford (1993).
-Ah A and Seiford L (1993), ‘The mathematical programming approach to efficiency analysis’, in: Fried H, Knox C A K and Schmidt S (editors), The measurement of productive efficiency: techniques and applications, Oxford University Press.

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