Data envelopment analysis Production technology Weak disposability Efficiency Closely related measures
MEHDILOO, M. and PODINOVSKI, V.V., 2019. Selective strong and weak disposability in efficiency analysis. European Journal of Operational Research. Doi: 10.1016/j.ejor.2019.01.064
The conventional constant and variable returns-to-scale models of data envelopment analysis (DEA) incorporate the assumption of strong, or free, disposability. According to this
assumption, each input can be increased and each output can be reduced independently
of the other measures. In this paper we argue that this assumption may not be suitable
in applications in which some inputs or outputs are closely related to each other. Assuming strong disposability of such closely related measures may lead to unrealistic input and
output profiles, and result in meaningless efficiency scores. Examples include inputs and
outputs that are strongly correlated, represent overlapping measures or situations in which
one measure is a subset of another. In this paper we develop production technologies that
allow the specification of groups of closely related inputs and outputs which are only jointly
weakly disposable. This assumption does not change the existing proportions between the
closely related measures in the same group. We demonstrate the usefulness of the suggested
approach by computational experiments.
This paper is in closed access until 1st Feb 2021.