Decision-making and Productivity Measurement

Abstract

In this chapter, the concepts of technical efficiency, efficiency, effectiveness, and productivity are illustrated. It is discussed that when firms are not homogeneous, the situation is the same as when each factor has a different unit of measurement from one firm to another, and therefore, no meaningful discrimination can be expressed, unless a set of known weights are introduced to standardize data. A linear programming data envelopment analysis model is used when a set of known weights are given to calculate the technical efficiency and efficiency of a set of homogeneous DMUs with multiple input factors and output factors. A numerical example is also provided.

Citation

Khezrimotlagh, D. (2020), "Decision-making and Productivity Measurement", Lawrence, K.D. and Pai, D.R. (Ed.) Applications of Management Science (Applications of Management Science, Vol. 20), Emerald Publishing Limited, Leeds, pp. 165-185. https://doi.org/10.1108/S0276-897620200000020013