Abstract
It is considerably important to calculate the cost efficiency in data envelopment analysis for the efficiency evaluation of decision-making units. The present paper develops the classical cost efficiency model in which all the input prices are constant and certain for each decision-making unit, considering undesirable outputs under the semi-disposability assumption. The proposed models are interval and uncertain under the constant returns to scale and also variable returns to scale assumptions, for the easy solution of which, their lower and upper bounds are obtained on the basis of the theorem presented in the text. In order to simulate the proposed models and show their scientific capabilities, additionally, 56 electricity producing thermal power plants in Iran were studied in 2015. Results of the present study show that under both assumptions of constant returns to scale and variable returns to scale, the highest cost efficiency bounds belonged to the combined and steam cycle power plants. Moreover, the average of lower and upper cost efficiency bounds of the power plants under study were 34% and 35%, respectively, in 2015, under the constant returns to scale assumption, and 52% and 54%, respectively, under the variable returns to scale assumption.
Highlights
Data envelopment analysis (DEA) is a method based on mathematical programming, and it was first presented by Chanrnes et al [1]
Where the input price information of each decision-making units (DMUs) is available, the cost efficiency evaluation can be conducted on the basis of Farrell’s approach, and in other cases, in which the exact prices of inputs are not known in each DMU, but only the lower and upper bounds of such prices are available, it is necessary to propose an appropriate method for the calculation of cost efficiency
What follows is a cost efficiency model for the evaluation of DMUo, considering the undesirable outputs on the basis of the output set under constant returns to scale (CRS) with the semi-disposability assumption: N
Summary
Data envelopment analysis (DEA) is a method based on mathematical programming, and it was first presented by Chanrnes et al [1]. Among other studies based on the weak disposability axiom, one can refer to the following: Chung et al [49], Zhou et al [50], Podinovski and Kuosmanen [51], Kuosmanen and Kazemi Matin [52], Leleu [53], Fang [54], Lozano [55], and Yang et al [56] Another approach to the efficiency evaluation of units with undesirable outputs is the semi-disposability assumption. To gain all-out economic growth, and development, it is necessary to increase the efficiency and optimize the existing resources of every industry, and those of the electricity industry To this end, the present study tries to evaluate the cost efficiencies of 56 thermal power plants of Iran in 2015 with a DEA approach, considering the undesirable outputs on the basis of the semi-disposability assumption.
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