Utilization of cross efficiency to improve efficiency under fixed input/output, Recent Applications of Data Envelopment Analysis

Abstract

In many real life applications, organizations struggle to improve the performance when inputs and outputs are exogenously fixed to a given value. In this paper, we have developed Data Envelopment Analysis (DEA) models and algorithms in order to improve the efficiency of an inefficient decision making unit (DMU) under constant sum of input and output constraint. The cross efficiency approach has been utilized to identify the target DMUs to allocate the excess amount of input. The excess amount is reallocated among the targeted DMUs without any reduction in their efficiency. Results have also been extended to include input/output weight restrictions. The proposed DEA models will help the decision makers to develop an optimal strategy to reallocate input/output among DMUs without adversely affecting their performance. An application of the results has been demonstrated through an example from health sector.