Abstract

When estimating returns to scale (RTS) using the Charnes, Cooper and Rhodes (CCR) RTS method in data envelopment analysis (DEA), there exist multiple optimal solutions which lead to error RTS estimation. This paper introduces the improved CCR RTS method for this problem. Given the existence of an optimal solution with Σλ* ≠ 1 in the CCR envelopment model, the existence of an optimal solution with Σλ* = 1 is the focus. A system of linear equality is constructed for the focus. And the corresponding 0-objective linear programming is also constructed to verify the feasibility of the system of linear equality. Therefore, RTS can be identified by the corresponding 0-objective linear programming and the obtained optimal solution in the CCR envelopment model.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.