Showing papers on "Data envelopment analysis published in 1984"

Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis

Abstract: In management contexts, mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best. In this capacity, mathematical programming serves as a planning aid to management. Data Envelopment Analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments, however they may have been planned or executed. Mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities. The CCR ratio form introduced by Charnes, Cooper and Rhodes, as part of their Data Envelopment Analysis approach, comprehends both technical and scale inefficiencies via the optimal value of the ratio form, as obtained directly from the data without requiring a priori specification of weights and/or explicit delineation of assumed functional forms of relations between inputs and outputs. A separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of DEA directly on observational data. Technical inefficiencies are identified with failures to achieve best possible output levels and/or usage of excessive amounts of inputs. Methods for identifying and correcting the magnitudes of these inefficiencies, as supplied in prior work, are illustrated. In the present paper, a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing, constant or decreasing returns to scale in multiple input and multiple output situations. The results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with "contestable market theories."

Production Frontiers and Panel Data

Abstract: This article considers estimation of a stochastic frontier production function-the type introduced by Aigner, Lovell, and Schmidt (1977) and Meeusen and van den Broeck (1977). Such a production frontier model consists of a production function of the usual regression type but with an error term equal to the sum of two parts. The first part is typically assumed to be normally distributed and represents the usual statistical noise, such as luck, weather, machine breakdown, and other events beyond the control of the firm. The second part is nonpositive and represents technical inefficiencythat is, failure to produce maximal output, given the set of inputs used. Realized output is bounded from above by a frontier that includes the deterministic part of the regression, plus the part of the error representing noise; so the frontier is stochastic. There also exist socalled deterministic frontier models, whose error term contains only the nonpositive component, but we will not consider them here (e.g., see Greene 1980). Frontier models arise naturally in the problem of efficiency measurement, since one needs a bound on output to measure efficiency. A good survey of such production functions and their relationship to the measurement of productive efficiency was given by F0rsund, Lovell, and Schmidt (1980).

A developmental study of data envelopment analysis in measuring the efficiency of maintenance units in the U.S. air forces

Abstract: : There are four basic questions related to efficiency and capability which are of particular interest to officials in the military services who are interested in better ways of evaluating military capability and efficiency: (1) What level of military capability can the services achieve with available resources? (2) What capability is required, and where are the shortfalls? (3) What resource acquisitions or redistributions are needed to achieve maximum improvement in efficiency and effectiveness? and (4) How can management systems be changed to improve the identification and correction of factors which limit the readiness and efficiency of our military operations? The last question, which differs in its emphasis from the other three, provides an opening to the topics that will be addressed in this report. In particular, reported are results from a study of DEA (Data Envelopment Analysis) as a method for evaluating the efficiency of Air Force Wings--or, more precisely, their maintenance operations--as elements in Numbered Units in the U.S. Air Force.

Preface to topics in data envelopment analysis

Abstract: This paper serves as an introduction to a series of three papers which are directed to different aspects of DEA (Data Envelopment Analysis) as follows: (1) uses and extensions of window analyses' to study DEA efficiency measures with an illustrative applications to maintenance activities for U.S. Air Force fighter wings, (2) a comparison of DEA and regression approaches to identifying and estimating, sources of inefficiency by means of artificially generated data, and (3) an extension of ordinary (linear programming) sensitivity analyses to deal with special features that require attention in DEA. Background is supplied in this introductory paper with accompanying proofs and explanations to facilitate understanding of what DEA provides in the way of underpinning for the papers that follow. An attempt is made to bring readers abreast of recent progress in DEA research and uses. A synoptic history is presented along with brief references to related work, and problems requiring attention are also indicated and possible research approaches also suggested.

Hospital efficiency measurement and evaluation. Empirical test of a new technique.

Abstract: A new technique for identifying inefficient hospitals, Data Envelopment Analysis (DEA), is field tested by application to a group of teaching hospitals. DEA is found to provide meaningful insights into the location and nature of hospital inefficiencies as judged by the opinion of a panel of hospital experts. DEA provides insights about hospital efficiency not available from the widely used efficiency evaluation techniques of ratio analysis and econometric-regression analysis. DEA is, therefore, suggested as a means to help identify and measure hospital inefficiency as a basis for directing management efforts toward increasing efficiency and reducing health care costs.

A Method for Assessing the Economic Impact of Information Systems Technology on Organizations

Abstract: Although the relative efficiency of information technology (IT) continues to improve at an exponential rate, the real investment in this technology throughout the economy is also expanding. Despite these two empirical facts, the ability of managements to assess the economic impact of IT on their organization's performance has not progressed very far in the past two decades. This paper presents a methodology for assessing the productivity of expenditures on information systems technology on the economic performance of business units (or profit centers), and demonstrates its use for several types of analysis within an organization. A business unit is modeled as a production process that employs various input resources to produce commodities which yield economic outputs (such as profits, revenues, ROI, market shares, etc.). The approach employs microeconomic production frontiers to compare output performance of organizational units through the method of data envelopment analysis based on mathematical programming. With IT expenditures isolated as separate input factors, methods for analyzing business unit performance based on production efficiency are described. Application of these procedures to cross-sectional and to longitudinal investigations of empirical data are discussed, and numerical examples are included. While the approach is primarily descriptive at this stage, it provides guidance for more indepth normative study to determine preferred management practices.

The range of the efficient frontier in multiple objective linear programming

Abstract: Because a rational decision maker should only select an efficient alternative in multiple criterion decision problems, the efficient frontier defined as the set of all efficient alternatives has become a central solution concept in multiple objective linear programming. Normally this set reduces the set of available alternatives of the underlying problem. There are several methods, mainly based on the simplex method, for computing the efficient frontier. This paper presents a quite different approach which uses a nonlinear parametric program, solved by Wolfe's algorithm, to determine the range of the efficient frontier.

Technology Modernization: A Decision Support System Incorporating Extensions of Data Envelopment Analysis for Prioritization of Contracts.

Abstract: : Technology Modernization (Tech Mod) is a DoD effort to incentivize U.S. industry to modernize their facilities and procedures. For DoD personnel to effectively manage the Tech Mod programs, they must not only understand the Tech Mod processes, but also the factors that control and influence the process. This thesis examines the environment that Tech Mod operates in, studies three Tech Mod decision processes, develops a normative decision process that can serve as a basis for a decision support system (DSS), and demonstrates how the normative model developed can be used in a DSS. The study of the Tech Mod environment coupled with the Tech Mod case studies were used to develop the normative model. In exploring ways to expand one of the modules in the flow diagram, the researchers developed a prioritization technique using as a basis the linear programming technique called Data Envelopment Analysis. The method developed ranks multiple input/output contracts using technical and allocation efficiencies as a basis. The method further allows the decision maker to analyze the prioritization scheme from several perspective, thus giving him a better understanding of the problem (inputs/outputs). The method may have generic application for profit and nonprofit organizations alike.