Most Productive Scale Size with Environmental Factors in Data Envelopment Analysis

Nowadays, evaluating the efficiency of entities and knowing how resources should be organized is a significant aspect in order to achieve optimal results. One of methods for the performance evaluation is data envelopment analysis (DEA). Also, one of the important DEA topics is the most productive scale size (MPSS) estimation. Due to the presence of undesirable factors in the production systems, models are suggested in this paper for evaluating MPSS and determining the largest and smallest MPSS (nearest and farthest points of MPSS) while undesirable outputs with weak disposability are available. Models proposed determine the role of environmental factors in the performance estimation of units. These models can be used in factories, hospitals and as well as environmental protection for continual monitoring on the environmental situation affected by industrial activities and also showing the impact of environmental factors in measuring the efficiency. We use data from the Chinese industry to present the theoretical results.