Coordination efficiency for general two-stage network system

Abstract

Two-stage network data envelopment analysis (DEA) is widely used to evaluate efficiency of different organizations with multiple operations processes or hierarchical structures. Although existing two-stage network DEA assumes two-stage systems resolve the inherent conflicts between two stages, the coordination effect between the two stages is usually ignored. Recently, the relation of two-stage network DEA to traditional “black box” DEA has been studied from the perspective of system coordination. A coordination efficiency was defined and measured by a DEA-based approach based on simple two-stage network systems. In this paper, we propose an extended DEA-based approach for measuring the coordination efficiency for general two-stage network systems. The paper shows that the coordination efficiency based on the multiplier DEA and envelopment DEA approaches is equivalent to each other under both constant returns to scale (CRS) and variable returns to scale (VRS) assumptions. The proposed approach is verified via two numerical examples finally.