Category: Frequently Asked Question

A factor which describes the amount of goods, services or other outcome obtained as a result of the processing of resources. Also, any factor which describes the qualitative nature of the resulting outcome.

An efficiency frontier is piecewise linear when the underlying production function is approximated through interconnected linear segments. The basic DEA models are all piecewise linear. See Chames et al (1981) for implications. [Chames A, Cooper W W and Rhodes E (1981), ‘Evaluating program and managerial efficiency: an application of data envelopment analysis to program follow …

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As the CCR primal model places no restriction on the weights other than a lower bound of epsilon, it is not rare for a unit to be rated efficient at the expense of having a very uneven distribution of weights where some or most of the factors have been practically ignored. To remedy the situation, …

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The requirement that the relationship between inputs and outputs not be erratic. Increasing the value of any input while keeping other factors constant should not decrease any output but should instead lead to an increase in the value of at least one output.

A factor which consists of a set of predefined values that are ranked in a specific order. An ordinal variable can be seen as a special case of a categorical variable. If the values of an ordinal factor need to be scaled, the inherent order must be preserved (Cook et al 1993). [Cook W, Kress …

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The efficiency scores of the DEA ratio models are independent of the units in which the factors are measured. The input and output values can thus be scaled through multiplication by a constant as proven in Chames and Cooper (1985). [Charnes A, Cooper W W (1985) ‘Preface to topics in data envelopment analysis’, in Thompson …

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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., …

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The process of developing a set of visual techniques such as graphs and charts through which the DEA results can be better understood.

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

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