An exploration of the concept of constrained improvement in data envelopment analysis
Constrained improvement refers to regulating rivalry between companies in a particular industry by defining a framework or an evaluation mechanism. Such a mechanism results in a more equitable and healthy competitive environment. The primary motivation is that the best-performing players in a particular industry improve their performance such that the rest of the contenders remain competitive. This study investigates the concept of constrained improvement from a frontier analysis perspective, develops a systematic implementation framework, and explores a novel application of sensitivity analysis in Data Envelopment Analysis (DEA). Original programming approaches are developed to discover the stability region considering a variable returns to scale. The objective is to determine the extent to which the input and output of a decision-making unit (DMU) can be improved or worsened before the configuration of the efficient frontier changes. Furthermore, the permissible change radius for the decision-making unit is identified, considering all possible change directions. The applicability of the approach is demonstrated using numerical examples.
Authors
- Pourya Pourhejazy (ORCID: https://orcid.org/0000-0002-1207-3587)
- Nasim Arabjazi (ORCID: https://orcid.org/0000-0003-0626-2434)
- Mohsen Rostamy‐Malkhalifeh (ORCID: https://orcid.org/0000-0001-6105-7674)
Institutions
- Islamic Azad University, Science and Research Branch (IR)
- Folkuniversitetet (SE)
- UiT The Arctic University of Norway (NO)
Publication Details
- Journal
- Decision Analytics Journal
- Published
- 2024-08-31
- DOI
- https://doi.org/10.1016/j.dajour.2024.100514
- Citations
- 3
- Primary Topic
- Efficiency Analysis Using DEA
- Type
- article
- Field-Weighted Citation Impact
- 1.47