A comprehensive method for the centralized resource allocation in DEA

J. Sadeghi, A. Dehnokhalaji

Research output: Contribution to journalArticle

Abstract

In this paper, we propose two new centralized resource allocation methods extending Lozano and Villa’s method (2004) to more general cases. The main assumption in this study is that all Decision Making Units (DMUs) are operating under the supervision of a central DMU in order to introduce the input and output targets for all units in the next production period. This paper considers two planning ideas. The first one is maximizing outputs produced with future planned resources and removing all input inefficiencies as much as possible while making all units strongly efficient. The second one is optimizing total revenue and cost functions to reach the best performance of the system. All units are assumed to be able to adjust their input consumptions and output productions in the current Production Possibility Set (PPS). Finally, we show that the two proposed methods provide the same results when input and output prices are replaced with their corresponding shadow prices. The proposed methods are illustrated with two empirical data sets.
Original languageEnglish
Pages (from-to)344-352
Number of pages9
JournalComputers and Industrial Engineering
Volume127
Early online date7 Oct 2018
DOIs
Publication statusPublished - 1 Jan 2019

Keywords

  • Cost function
  • Data envelopment analysis
  • Resource allocation
  • Revenue function

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