Evaluating sustainable efficiency of decision-making units considering undesirable outputs: an application to airline using integrated multi-objective DEA-TOPSIS.

Abstract

Sustainable development has gained significant attention in the literature due to the increased global awareness of environmental sustainability during the last decade. Sustainable development has three aspects, including economic, social, and environmental. The challenge of sustainable development is to establish a balance between these three aspects. Assessing the efficiency of a company contributes comprehensive information to improve its overall performance. Despite numerous studies in this field, the literature lacks studies that simultaneously consider all three aspects of sustainable development, especially the social aspect. The main objective of this paper is to calculate the technical, social, and environmental efficiency scores. We also introduce a new efficiency called sustainable efficiency that merges all three sustainable development aspects in one efficiency score. This study applies two existing data envelopment analysis (DEA) models to evaluate technical, social, environmental, and sustainable efficiencies. These models, namely the three-step method and the modified three-step method, are computationally intensive. Also, this paper introduces two new DEA models, namely the common weight goal programming DEA and the common weight DEA, to assess the efficiencies with much fewer computations. Each model produces results that are different from one another. Therefore, the TOPSIS approach is applied to provide an overall result by integrating the results obtained from the four presented models. For this purpose, the implementation of four TOPSIS models is required. To illustrate the capability and validity of the developed models in efficiency calculation, a case of Iranian airlines is presented. The selected airlines are evaluated in different aspects, and final results are obtained by applying TOPSIS. The findings show that using TOPSIS to combine the results of several DEA models leads to a fully ranking of airlines in four aspects of technical, social, environmental, and sustainable efficiencies. Also, it is recommended to managers to probe pairwise comparison between different efficiencies of airlines in order to find and improve the weak ones.