Data envelopment analysis is not multiobjective analysis

Abstract

Data envelopment analysis (DEA) is a multicriteria technique which can take into account multiple inputs and outputs to produce a single aggregate measure of relative efficiency for a set of comparable units. DEA takes into consideration other objectives by including the appropriate variables as part of the DEA model. However, as we will demonstrate, collapsing all the inputs and outputs of several objectives into one aggregate performance measure weakens DEA's ability to discriminate the individual impact of each of these objectives. In this chapter, we apply a multiple objective extension to DEA, called multiple objective DEA (MODEA), which simultaneously controls the weights assigned to the variables found in more than one objective. This MODEA approach more fully measures the impact of each objective and allows the decision-maker to address trade offs among these objectives. The usefulness of the MODEA approach is demonstrated by applying it to the hypothetical example.

Citation

Klimberg, R.K., Lawrence, K.D. and Lawrence, S.M. (2010), "Data envelopment analysis is not multiobjective analysis", Lawrence, K.D. and Kleinman, G. (Ed.) Applications in Multicriteria Decision Making, Data Envelopment Analysis, and Finance (Applications of Management Science, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 79-93. https://doi.org/10.1108/S0276-8976(2010)0000014007