An Equitable Allocation of Fixed Costs and Resources: A Data Envelopment Analysis Approach

Abstract

In many applications of data envelopment analysis (DEA) approach, there is often a fixed cost or resource which is imposed on all decision making units (DMUs). One nature question then is: how can this cost or resource be assigned in a reasonable way to various DMUs? In this paper, we present a new DEA-based method for obtaining this cost or resource allocation. To illustrate our methods, numerical results for an example from the literature are presented.