Allocating a fixed cost across decision-making units with undesirable outputs: A bargaining game approach

2021 ◽  
pp. 1-17
Author(s):  
Feng Li ◽  
Yue Wang ◽  
Ali Emrouznejad ◽  
Qingyuan Zhu ◽  
Gang Kou
Keyword(s):  
Decision Making ◽  
Bargaining Game ◽  
Fixed Cost ◽  
Undesirable Outputs ◽  
Decision Making Units

Relative Efficiency of Decision Making Units Producing Both Desirable and Undesirable Outputs: A Case of Textile Processing Units in Pakistan.

2011 ◽  
Vol 50 (4II) ◽  
pp. 685-698
Author(s):  
Samina Khalil
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Relative Efficiency ◽  
Value Added ◽  
Data Envelopment ◽  
Undesirable Outputs ◽  
Textile Processing ◽  
Decision Making Unit ◽  
Desirable And Undesirable Outputs ◽  
Decision Making Units

This paper aims at measuring the relative efficiency of the most polluting industry in terms of water pollution in Pakistan. The textile processing is country‘s leading sub sector in textile manufacturing with regard to value added production, export, employment, and foreign exchange earnings. The data envelopment analysis technique is employed to estimate the relative efficiency of decision making units that uses several inputs to produce desirable and undesirable outputs. The efficiency scores of all manufacturing units exhibit the environmental consciousness of few producers is which may be due to state regulations to control pollution but overall the situation is far from satisfactory. Effective measures and instruments are still needed to check the rising pollution levels in water resources discharged by textile processing industry of the country. JEL classification: L67, Q53 Keywords: Data Envelopment Analysis (DEA), Decision Making Unit (DMU), Relative Efficiency, Undesirable Output

A Common Set of Weights for Ranking Decision-Making Units with Undesirable Outputs: A Double Frontiers Data Envelopment Analysis Approach

2018 ◽  
Vol 35 (06) ◽  
pp. 1850039 ◽  
Author(s):  
Lei Chen ◽  
Fei-Mei Wu ◽  
Feng Feng ◽  
Fujun Lai ◽  
Ying-Ming Wang
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Optimal Solution ◽  
Data Envelopment ◽  
Undesirable Outputs ◽  
Discrimination Power ◽  
Efficiency Optimization ◽  
Common Set Of Weights ◽  
Desirable And Undesirable Outputs ◽  
Decision Making Units

Major drawbacks of the traditional data envelopment analysis (DEA) method include selecting optimal weights in a flexible manner, lacking adequate discrimination power for efficient decision-making units, and considering only desirable outputs. By introducing the concept of global efficiency optimization, this study proposed a double frontiers DEA approach with undesirable outputs to generate a common set of weights for evaluating all decision-making units from both the optimistic and pessimistic perspectives. For a unique optimal solution, compromise models for individual efficiency optimization were developed as a secondary goal. Finally, as an illustration, the models were applied to evaluate the energy efficiency of the Chinese regional economy. The results showed that the proposed approach could improve discrimination power and obtain a fair result in a case where both desirable and undesirable outputs exist.

Slacks-Based Efficiency Measurements with Undesirable Outputs in Data Envelopment Analysis

2014 ◽  
Vol 16 (04) ◽  
pp. 1005-1021 ◽  
Author(s):  
Jie Wu ◽  
Xiang Lu ◽  
Dong Guo ◽  
Liang Liang
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Production Process ◽  
Environmental Performance ◽  
Decision Makers ◽  
European Countries ◽  
Data Envelopment ◽  
Undesirable Outputs ◽  
Theoretical Justification ◽  
Decision Making Units

Data envelopment analysis (DEA) has recently gained great popularity in modeling environmental performance because it provides condensed information to decision makers when the production process includes undesirable outputs. In this paper, we develop a new slacks-based efficiency measurement for modeling environmental performance using the environmental DEA technology. The proposed index has more theoretical justification, and distinguishes among different decision making units (DMUs) better in practice. Then we further extend it to the nonoriented index with double aim of increasing desirable outputs and reducing undesirable outputs. Finally, we calculate the index for each of 25 OECD European countries in a model of CO2 emission performance from 2007 to 2009 and the results obtained are presented.

scholarly journals An investigation of the undesirable outputs congestion in data envelopment analysis

2020 ◽  
Vol 33 (02) ◽  
pp. 468-475
Author(s):  
Soodabeh Nazari ◽  
Mohsen Rostamy-Malkhalifeh ◽  
Ali Hamzehee
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Decision Maker ◽  
The Other ◽  
Data Envelopment ◽  
Undesirable Outputs ◽  
Total Cost ◽  
Know How ◽  
Total Profit ◽  
Decision Making Units

Congestion is one of the most important subjects in Data Envelopment Analysis (DEA) which helps the Decision Maker (DM) to decide about changing the size of units. The estimation of congestion has attractive advantages from different perspectives. For example, the total cost of a partiular DMU, in which the congestion occurs, can be reduced by the decreases in inputs. On the other hand, the output of units can be increased by the recognizing and eliminating the congestion of DMUs and so, the total profit of decision making units can be increased. Hence, the management is eager to know how to recognize and eliminate the congestion of units. Most of the existing methods to estimation of the congestion in the literature consider only the desirable outputs. This study focuses on the evaluation of congestion in the presence of undesirable outputs and proposes an approach to recognize the congestion of units. The method is demonstrated on a numerical example to illustrate the validity of the proposed method.

Bargaining game model in the evaluation of decision making units

2009 ◽  
Vol 36 (3) ◽  
pp. 4357-4362 ◽  
Author(s):  
Jie Wu ◽  
Liang Liang ◽  
Feng Yang ◽  
Hong Yan
Keyword(s):  
Decision Making ◽  
Bargaining Game ◽  
Game Model ◽  
Decision Making Units

Fair Allocation Fixed Cost Using Cross-Efficiency Based on Pareto Concept

2020 ◽  
Vol 37 (01) ◽  
pp. 1950036
Author(s):  
Hamid Sharafi ◽  
Farhad Hosseinzadeh Lotfi ◽  
Gholam Reza Jahanshahloo ◽  
Somayeh Razipour-GhalehJough
Keyword(s):  
Decision Making ◽  
Cost Allocation ◽  
Fixed Cost ◽  
Data Envelopment ◽  
Fair Allocation ◽  
Fixed Costs ◽  
Suggested Model ◽  
Shared Resources ◽  
Decision Making Units ◽  
Significant Point

Among homogeneous entities, there are some shared resources from which all the entities benefit. A significant point is to allocate the fixed costs of these shared resources equitably between entities. Data envelopment analysis is a technique applied for decision-making, concerning and evaluating the performance of decision-making units. One of the functions of these units is to solve the fair fixed cost allocation problem, based on the performance of a set of homogeneous decision-making units. In this paper, a method for allocating fixed costs using cross efficiency has been suggested, where the obtained result is Pareto cross-efficient. Moreover, the proposed method helps estimate the value of [Formula: see text] (lower bound of weights) and the mode of selecting [Formula: see text] for the suggested model using the standard deviation. Finally, by using a numerical example, the proposed method of allocating fixed costs is compared to the previous ones.

scholarly journals DEA-based competition strategy in the presence of undesirable products: An application to paper mills

2021 ◽  
Vol 31 (2) ◽  
Author(s):  
Alireza Amirteimoori ◽  
Simin Masrouri
Keyword(s):  
Decision Making ◽  
Efficient Frontier ◽  
Data Envelopment ◽  
Undesirable Outputs ◽  
Competition Strategy ◽  
Paper Mills ◽  
Trade Off ◽  
Production Processes ◽  
Output Factors ◽  
Decision Making Units

In real applications of data envelopment analysis (DEA), there are cases in which undesirable outputs are produced along with desirable outputs in such a way that the total sum of the produced undesirable outputs over the production units must be fixed and constant. In this case, a trade-off between the decision making units (DMUs) is needed to balance the production of undesirable outputs. In a rational sight, this trade-off is done in such a way that all DMUs improve their relative performances. In this paper, a single DEA-based model is proposed to model fixed and variable-sum undesirable outputs in production processes. A common equilibrium efficient frontier is constructed and after reallocating the input/output factors, all decision making units (DMUs) prevail as efficient. A real case of 32 paper mills in China is given. The analysis results demonstrated that some economically developed paper mills have better performance than less developed paper mills; in particular, all efficient paper mills are the developed ones.

NONRADIAL APPROACH TO ALLOCATING FIXED-COSTS AND COMMON REVENUE USING CENTRALIZED DEA

2014 ◽  
Vol 13 (01) ◽  
pp. 29-46 ◽  
Author(s):  
SEBASTIÁN LOZANO
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Simple Approach ◽  
Fixed Cost ◽  
Data Envelopment ◽  
Fixed Costs ◽  
Decision Making Units ◽  
Allocation Methods

In this paper, a simple approach to allocating fixed costs and common revenue among different units is presented. It is based on centralized data envelopment analysis (DEA) and uses a weighted, slacks-based, nonradial metric. The approach is units-invariant and takes into account the inefficiencies in the assessed decision making units (DMUs). The approach works when the fixed cost is a complement of another input as well as when no other inputs exist. The proposed approach is compared with existing allocation methods using several datasets from the literature.

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