2011•Journal of mathematical extension.Open access

Measuring the Relative Efficiency inMulti-Component Decision Making Units andits Application to Bank Branches

Abbas Ali Noora, Farhad Hosseinzadeh Lotfı, Ali Payan

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Abstract

In many cases of data envelopment analysis (DEA), decision making units (DMUs) can be separated into different components. These DMUs are called multi-component DMUs, and studying them is known as multi-component DEA. In multi-component DEA some inputs are shared among the components of a DMU, and some components involve into producing some outputs of the DMU. In this paper, we survey measuring the relative efficiency in multi-component DEA. It is shown that using common idea for measuring the efficiency of multi-component DMUs, the relative efficiency of an evaluating DMU may be not obtained. Therefore, present paper proposes a new DEA model which can obtain the relative efficiencies of multi-component DMUs. Some facts about the proposed approach are also provided by theorems. Moreover, the proposed DEA model is compared to another approach in literature utilizing a set of data about 19 bank branches.

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What this paper is about

In many cases of data envelopment analysis (DEA), decision making units (DMUs) can be separated into different components. These DMUs are called multi-component DMUs, and studying them is known as multi-component DEA. In multi-component DEA some inputs are shared among the components of a DMU, and some components involve into producing some outputs of the DMU. In this paper, we survey measuring the relative efficiency in multi-component DEA. It is shown that using common idea for measuring the efficiency of multi-component DMUs, the relative efficiency of an evaluating DMU may be not obtained. Therefore, present paper proposes a new DEA model which can obtain the relative efficiencies of multi-component DMUs. Some facts about the proposed approach are also provided by theorems. Moreover, the proposed DEA model is compared to another approach in literature utilizing a set of data about 19 bank branches.

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Available abstract

In many cases of data envelopment analysis (DEA), decision making units (DMUs) can be separated into different components. These DMUs are called multi-component DMUs, and studying them is known as multi-component DEA. In multi-component DEA some inputs are shared among the components of a DMU, and some components involve into producing some outputs of the DMU. In this paper, we survey measuring the relative efficiency in multi-component DEA. It is shown that using common idea for measuring the efficiency of multi-component DMUs, the relative efficiency of an evaluating DMU may be not obtained. Therefore, present paper proposes a new DEA model which can obtain the relative efficiencies of multi-component DMUs. Some facts about the proposed approach are also provided by theorems. Moreover, the proposed DEA model is compared to another approach in literature utilizing a set of data about 19 bank branches.

Key concepts: Data envelopment analysis, Component (thermodynamics), Efficiency, Set (abstract data type), Mathematics, Mathematical optimization, Computer science, Econometrics

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