Better resource utilization: A new DEA bi-objective resource reallocation approach considering environmental efficiency improvement

Abstract

This study addresses the resource reallocation problem by proposing a data envelopment analysis (DEA) bi-objective approach that considers the environmental efficiency improvement of organizations (i.e., decision making units, DMUs). First, we introduce environmental efficiency evaluation models with and without the consideration of resource reallocation. Second, we prove that all the DMUs can be environmentally efficient after resource reallocation using a common-weight evaluation mechanism and build the resource reallocation possibility set. Third, a bi-objective resource reallocation model is proposed which considers both output target realizability and the match between the new reallocated resource of a DMU and the DMU’s pre-performance and operation size. Further, a trade-off model is adopted to solve the bi-objective model to obtain the final resource reallocation result. The proposed approach guarantees that all the DMUs are environmentally efficient after resource reallocation while maintaining the non-resource inputs at their current levels. It also contributes by considering both the DMUs’ ability of achieving the output targets and each DMU’s pre-performance which is an important indicator that reflects each DMU’s ability to transform input resources into output products. Finally, the proposed approach is applied for a case study of Chinese regional land transportation systems based on data of the year 2016.