Proposing a New Model on Data Envelopment Analysis by Considering Non Discretionary Factors and a Review on Previous Models

Discretionary models of data envelopment analysis (DEA) assume that all inputs and outputs are discretionary, i.e., controlled by the management of each decision making unit (DMU) and varied at its discretion. In any realistic situation, however, there may exist exogenously fixed or non-discretionary inputs or outputs that are beyond the control of a DMU's management. There are some models that incorporate non-discretionary inputs into DEA models. This paper reviews these approaches, providing a discussion of strengths and weaknesses and highlighting potential limitations. Moreover, a new method is developed that overcomes existing weaknesses.