Efficiency study with undesirable inputs and outputs in DEA

Abstract

Data Envelopment Analysis (DEA) is one of the well-known methods for calculating efficiency, determining efficient boundaries and evaluating efficiency that is used in specific input and output conditions. Traditional models of DEA do not try to reduce undesirable outputs and increase undesirable inputs. Therefore, in this study, in addition to determining the efficiency of Decision-Making Units (DMU) with the presence of some undesirable input and output components, its effect has also been investigated on the efficiency limit. To do this, we first defined the appropriate production possibility set according to the problem assumptions, and then we presented a new method to determine the unfavorable performance of some input and output components in decision-making units. And we determined the impact of unfavorable inputs and outputs on the efficient boundary. We also showed the model result by providing examples for both unfavorable input and output states and solving them and determining the efficiency score and driving them to the efficient boundary by plotting those boundaries.