Abstract
Performance evaluation using interactive methods and extended ratio-based approaches can be very important for some organizations. Free disposal hull models can be created if there is no concern for convexity, and using non-radial DEA models can simultaneously create more logical and practical situations for finding DMU targets. In this paper, a new hybrid technique based on the additive slack based method and enhanced Russel measure in variable return to scale technology has been proposed. The proposed technique can find decision making unit targets in non-radial free disposal hull models using the step method. Furthermore, the extended ratio-based approach in the proposed technique has been applied to find DMU targets of related non-radial free disposal hull models without solving any mathematical programming models. Finally, targets of Fars province pharmaceutical distributing companies were found by applying the proposed hybrid technique.
Highlights
The accurate estimation of production possibility set (PPS) boundaries is crucial for performance analysis and efficient estimation
A hybrid technique to answer the above two research questions with the following properties has been proposed as the innovation of this research: (a) decision making units (DMUs) target finding in non-radial Free Disposal Hull (FDH) models based on additive slacks-based models (ASBM) are more realistic because they are based on a non-convexity assumption, (b) Proposing a new linear programming (LP) formulation of ASBM, (c) Applying Interactive methods (IMs) instead of regular data envelopment analysis (DEA) methods to find FDH models targets which have more adaptation to the decision maker (DM)’s preferences, (d) Finding the required DMU targets in FDH models using an algorithm that works by checking some conditions for DMUs without solving of any mathematical models
The results show that only 2 DMUs lay on the efficient frontier, and 11 DMUs did not (Appendix A, Table A1)
Summary
The accurate estimation of production possibility set (PPS) boundaries is crucial for performance analysis and efficient estimation. To the best of our knowledge, STEM has not yet been used by researchers to find targets in non-radial FDH models which consider ASBM and enhanced Russel measures in variable return to scale technology (the first research gap). Non-radial FDH models based on ASBM in variable return to scale technology can be considered in the proposal for a technique for finding DMU targets. (1) Is it possible to propose a technique to find all DMU targets in non-radial FDH models based on ASBM using IM?. (b) Proposing a new LP formulation of ASBM, (c) Applying IMs instead of regular DEA methods to find FDH models targets which have more adaptation to the DM’s preferences, (d) Finding the required DMU targets in FDH models using an algorithm that works by checking some conditions for DMUs without solving of any mathematical models. The presented technique is applied in two real case studies
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