Evaluating the performances of decision-making units based on the optimistic and pessimistic points of view
Data envelopment analysis (DEA) is a methodology for assessing the performances of a group of decision making units (DMUs) that utilize multiple inputs to produce multiple outputs. It measures the performances of the DMUs by maximizing the efficiency of every DMU, respectively, subject to the constraints that none of the efficiencies of the DMUs can be less than one. The efficiencies measured in this way are referred to as optimistic efficiencies or the best relative efficiencies. The way to measure the optimistic efficiencies of the DMUs is referred to as self-evaluation. If a DMU is self-evaluated to have an efficiency score of one, then it is said to be DEA efficient; otherwise, the DMU is said to be non-DEA efficient. There is a comparable approach which uses the concept of inefficiency frontier for determining the worst relative efficiency score that can be assigned to each DMU. DMUs on the inefficiency frontier are specified as DEA-inefficient, and those that do not lie on the inefficient frontier, are declared to be DEA-non-inefficient. In this paper, we argue that both relative efficiencies should be considered simultaneously, and any approach that considers only one of them will be biased. For measuring the overall performance of the DMUs, we propose to integrate both efficiencies in the form of an interval, and we call the proposed DEA models for efficiency measurement the bounded DEA models. In this way, the efficiency interval provides the decision maker with all the possible values of efficiency, which reflect various perspectives.
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