Abstract
Previous DEA studies have provided useful managerial information on improving the productivity of managers’ organizations. This study tries to clarify the implicit assumptions of Ruggiero’s (1998) three-stage DEA model and the data fitness that was overlooked in the three-stage-DEA. However, the model is extended to avoid possible bias or faulty results. As such, the distinct extended features are presented and discussed. With the presented features and a designated procedure including normality test, practitioners and researchers can apply this work to other related managerial applications as well as cited areas. Key words: Model, assumption, stochastic frontier analysis (SFA), data envelopment analysis (DEA), three-stage DEA, environmental effects, normality test, linear regression.
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