Stochastic Directional Distance Efficiency and Scale Elasticity of Two-Stage Processes with Undesirable Outputs

The aim of this study is to provide approaches to analyse the performance of two-stage processes under managerial disposability and to address their scale elasticity where there are random input-output measures and undesirable outputs.For this purpose, the performance of general systems and stages is measured using the proposed chanceconstrained distance directional function two-stage DEA approach under managerial disposability.Furthermore, the stochastic directional scale elasticity of two-stage processes is addressed.To accomplish this, a response function is presented, and the right and left scale elasticity of efficient general systems for the examined risk levels are taken into consideration.A dataset from the Iranian banking sector is used to illustrate the suggested models.The results show that the proposed approaches are practical for estimating the efficiency and scale elasticity of two-stage networks in the presence of random measures and undesirable outputs.