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Generalized DEA: an approach for supporting input/output factor determination in DEA

Mohsen Afsharian (Technische Universität Braunschweig, Braunschweig, Germany)
Heinz Ahn (Technische Universität Braunschweig, Braunschweig, Germany)
Ludmila Neumann (Technische Universität Braunschweig, Braunschweig, Germany)

Benchmarking: An International Journal

ISSN: 1463-5771

Article publication date: 3 October 2016

589

Abstract

Purpose

The determination of input and output factors is a well-known source of pitfalls when applying data envelopment analysis (DEA). The purpose of this paper is to contribute to overcome the respective problems of input/output factor determination related to factor selection, dual-role factors and undesirable factors.

Design/methodology/approach

The problems of input/output factor determination are discussed from a goal-oriented perspective, shedding a new light on the role of input/output factors in DEA. This is exemplified by the case of measuring pharmacy stores’ efficiency concerning their goal of customer retention.

Findings

The findings suggest to applying a generalized DEA (GDEA). The three steps of this approach include the development of a system of objectives, the derivation of corresponding performance criteria as well as the construction of cost and benefit functions. These functions build the basis for GDEA models, of which one is exemplarily described and applied to the customer retention case.

Research limitations/implications

While traditional DEA implicitly assumes linear cost and benefit functions, GDEA requires to explicitly specifying these functions. In doing so, the approach contributes to solve the problem of factor selection, the problem of dual-role factors and the problem of undesirable factors.

Practical implications

For determining input/output factors in a consistent and transparent manner, it is recommended to apply GDEA in practical benchmarking studies.

Originality/value

GDEA integrates well-known concepts of multi-criteria decision making into traditional DEA. The new approach helps to cope with the challenges of input/output factor determination in DEA.

Keywords

Acknowledgements

The authors thank two anonymous reviewers for their helpful comments and suggestions. Also, the authors gratefully acknowledge the financial support of the Deutsche Forschungsgemeinschaft (DFG) in the context of the research project AH 90/5-1.

Citation

Afsharian, M., Ahn, H. and Neumann, L. (2016), "Generalized DEA: an approach for supporting input/output factor determination in DEA", Benchmarking: An International Journal, Vol. 23 No. 7, pp. 1892-1909. https://doi.org/10.1108/BIJ-07-2015-0074

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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