Data envelopment analysis (DEA) is a powerful mathematical method that utilises linear programming (LP) to determine the relative efficiencies of a set of functionally similar decision-making units (DMUs). Evaluating the efficiency of DMUs continues to be a difficult problem to solve, especially when the multiplicity of inputs and outputs associated with these units is considered. Problems related to computational complexities arise when there are a relatively large number of redundant variables and constraints in the problem. In this paper, we propose a three-step algorithm to reduce the computational complexities and costs in the multiplier DEA problems. In the first step, we identify some of the inefficient DMUs through input-output comparisons. In the second step, we specify the efficient DMUs by solving a LP model. In the third step, we use the results derived from the second step and another LP model to obtain the efficiency of the inefficient DMUs. We also present a numerical example to demonstrate the applicability of the proposed framework and exhibit the efficacy of the procedures and algorithms.
|Number of pages
|International Journal of Productivity and Quality Management
|Published - 27 Dec 2011