Journal
OMEGA-INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE
Volume 51, Issue -, Pages 121-127Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.omega.2014.09.008
Keywords
Data envelopment analysis; Network; Hierarchy; Efficiency
Funding
- National Science Council Taiwan [NSC101-2410-H-006-017-MY3]
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The conventional data envelopment analysis (DEA) models for measuring the relative efficiency of a set of decision making units (DMUs), without considering the operations of the component processes, often produce misleading results, and network models have thus been recommended. This paper discusses the development of a network DEA model for systems with a hierarchical structure. It is shown that the hierarchical structure is equivalent to a parallel structure, with the components being the units at the bottom of the hierarchy. Due to the characteristics of a parallel system, the efficiency of a hierarchical system is thus a weighted average of those of the units at the bottom of the hierarchy. A hypothetic example shows that the proposed model is able to distinguish the order of the efficient DMUs evaluated by the conventional DEA model. Moreover, it provides the efficiencies of the functions of the DMU, which enables managers to identify areas of weakness, and thus better focus efforts to improve overall performance. (C) 2014 Elsevier Ltd. All rights reserved.
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