Allocating the fixed cost: an approach based on data envelopment analysis and cooperative game

Yongjun Li, Feng Li, Ali Emrouznejad, Liang Liang, Qiwei Xie

Research output: Contribution to journalArticle

Abstract

Allocating the fixed cost among a set of users in a fair way is an important issue both in management and economic research. Recently, Du et al. (Eur J Oper Res 235(1): 206–214, 2014) proposed a novel approach for allocating the fixed cost based on the game cross-efficiency method by taking the game relations among users in efficiency evaluation. This paper proves that the novel approach of Du et al. (Eur J Oper Res 235(1): 206–214, 2014) is equivalent to the efficiency maximization approach of Li et al. (Omega 41(1): 55–60, 2013), and may exist multiple optimal cost allocation plans. Taking into account the game relations in the allocation process, this paper proposes a cooperative game approach, and uses the nucleolus as a solution to the proposed cooperative game. The proposed approach in this paper is illustrated with a dataset from the prior literature and a real dataset of a steel and iron enterprise in China.
Original languageEnglish
Pages (from-to)373–394
Number of pages22
JournalAnnals of Operations Research
Volume274
Issue number1-2
Early online date21 Apr 2018
DOIs
Publication statusPublished - 15 Mar 2019

Fingerprint

Cooperative game
Fixed costs
Data envelopment analysis
Management research
Cost allocation
China
Economic research
Evaluation
Iron and steel
Nucleolus

Bibliographical note

The final publication is available at Springer via http://dx.doi.org/10.1007/s10479-018-2860-9

Keywords

  • Cooperative game
  • Data envelopment analysis (DEA)
  • Fixed cost allocation
  • Nucleolus

Cite this

Li, Yongjun ; Li, Feng ; Emrouznejad, Ali ; Liang, Liang ; Xie, Qiwei. / Allocating the fixed cost : an approach based on data envelopment analysis and cooperative game. In: Annals of Operations Research. 2019 ; Vol. 274, No. 1-2. pp. 373–394.
@article{0036fe753fb94b6695e2b6a829358387,
title = "Allocating the fixed cost: an approach based on data envelopment analysis and cooperative game",
abstract = "Allocating the fixed cost among a set of users in a fair way is an important issue both in management and economic research. Recently, Du et al. (Eur J Oper Res 235(1): 206–214, 2014) proposed a novel approach for allocating the fixed cost based on the game cross-efficiency method by taking the game relations among users in efficiency evaluation. This paper proves that the novel approach of Du et al. (Eur J Oper Res 235(1): 206–214, 2014) is equivalent to the efficiency maximization approach of Li et al. (Omega 41(1): 55–60, 2013), and may exist multiple optimal cost allocation plans. Taking into account the game relations in the allocation process, this paper proposes a cooperative game approach, and uses the nucleolus as a solution to the proposed cooperative game. The proposed approach in this paper is illustrated with a dataset from the prior literature and a real dataset of a steel and iron enterprise in China.",
keywords = "Cooperative game, Data envelopment analysis (DEA), Fixed cost allocation, Nucleolus",
author = "Yongjun Li and Feng Li and Ali Emrouznejad and Liang Liang and Qiwei Xie",
note = "The final publication is available at Springer via http://dx.doi.org/10.1007/s10479-018-2860-9",
year = "2019",
month = "3",
day = "15",
doi = "10.1007/s10479-018-2860-9",
language = "English",
volume = "274",
pages = "373–394",
journal = "Annals of Operations Research",
issn = "0254-5330",
publisher = "Springer",
number = "1-2",

}

Allocating the fixed cost : an approach based on data envelopment analysis and cooperative game. / Li, Yongjun; Li, Feng; Emrouznejad, Ali; Liang, Liang; Xie, Qiwei.

In: Annals of Operations Research, Vol. 274, No. 1-2, 15.03.2019, p. 373–394.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Allocating the fixed cost

T2 - an approach based on data envelopment analysis and cooperative game

AU - Li, Yongjun

AU - Li, Feng

AU - Emrouznejad, Ali

AU - Liang, Liang

AU - Xie, Qiwei

N1 - The final publication is available at Springer via http://dx.doi.org/10.1007/s10479-018-2860-9

PY - 2019/3/15

Y1 - 2019/3/15

N2 - Allocating the fixed cost among a set of users in a fair way is an important issue both in management and economic research. Recently, Du et al. (Eur J Oper Res 235(1): 206–214, 2014) proposed a novel approach for allocating the fixed cost based on the game cross-efficiency method by taking the game relations among users in efficiency evaluation. This paper proves that the novel approach of Du et al. (Eur J Oper Res 235(1): 206–214, 2014) is equivalent to the efficiency maximization approach of Li et al. (Omega 41(1): 55–60, 2013), and may exist multiple optimal cost allocation plans. Taking into account the game relations in the allocation process, this paper proposes a cooperative game approach, and uses the nucleolus as a solution to the proposed cooperative game. The proposed approach in this paper is illustrated with a dataset from the prior literature and a real dataset of a steel and iron enterprise in China.

AB - Allocating the fixed cost among a set of users in a fair way is an important issue both in management and economic research. Recently, Du et al. (Eur J Oper Res 235(1): 206–214, 2014) proposed a novel approach for allocating the fixed cost based on the game cross-efficiency method by taking the game relations among users in efficiency evaluation. This paper proves that the novel approach of Du et al. (Eur J Oper Res 235(1): 206–214, 2014) is equivalent to the efficiency maximization approach of Li et al. (Omega 41(1): 55–60, 2013), and may exist multiple optimal cost allocation plans. Taking into account the game relations in the allocation process, this paper proposes a cooperative game approach, and uses the nucleolus as a solution to the proposed cooperative game. The proposed approach in this paper is illustrated with a dataset from the prior literature and a real dataset of a steel and iron enterprise in China.

KW - Cooperative game

KW - Data envelopment analysis (DEA)

KW - Fixed cost allocation

KW - Nucleolus

UR - https://link.springer.com/article/10.1007%2Fs10479-018-2860-9

UR - http://www.scopus.com/inward/record.url?scp=85045738181&partnerID=8YFLogxK

U2 - 10.1007/s10479-018-2860-9

DO - 10.1007/s10479-018-2860-9

M3 - Article

VL - 274

SP - 373

EP - 394

JO - Annals of Operations Research

JF - Annals of Operations Research

SN - 0254-5330

IS - 1-2

ER -