Evaluating the efficiency of a two-stage network structure with the use of fractional programming

Abstract

Recently, network data envelopment analysis (NDEA) models have been developed to evaluate the efficiency of decision making units (DMUs) with internal structures. The network structures range from a simple two-stage process to a complex system. Looking through the literature on two-stage network structures, we see that Li et al. (2012) extended a model by assuming that the inputs to the second stage include both the outputs from the first stage and additional inputs to the second stage. In the current study, a model is proposed to evaluate the performance of these types of general two-stage network structures. To this end, we provide a linear model using fractional programming. In fact, previous models were often nonlinear models which were solved with heuristic methods. But, since the model presented in this paper is a linear model, then it can be solved easily as a linear programming problem. In order to clarify the newly proposed approach of this study, it has been applied to a case of regional Research and Development (R&D) system related to 30 provincial level regions in China and results have been compared with the heuristic method of Li et al. (2012).