Development of a new cost PPS and decomposition of observed actual cost for DMU in a non-competitive space in DEA
RAIRO - Operations Research - Recherche Opérationnelle, Tome 53 (2019) no. 5, pp. 1563-1580.

Data Envelopment Analysis (DEA) is an appropriate tool for estimating various types of efficiency such as cost efficiency. There are two different sates in cost spaces; in the first space prices are equal for all Decision Making Units (DMUs) which is competitive space, and in the second space prices are different form one DMU to another; this is known as non-competitive space. The present paper introduces a new method to assess Cost Efficiency (CE), Revenue Efficiency (RE) and Profit Efficiency (PE) in a non-competitive space. The present paper also proposes a Production Possibility Set (PPS) in which DMUs are evaluated based on both their own prices and the prices of other DMUs in non-competitive space. Moreover, a new decomposition is provided for observed actual cost DMUs based on the cost efficiency model and the proposed PPS, thus the observed actual cost can be shown by summation of several technical, price and allocative efficiency (AE) losses. The biggest advantage of this method comparing to the previous methods is that passive the developed cost efficiency and the cost Production Possibility Set has been developed and the performed decomposition is more accurate; this is because the new inefficiency sources are defined and added to this new decomposition. Therefore, it includes more inefficient sources.

Reçu le :
Accepté le :
DOI : 10.1051/ro/2019068
Classification : 90B99, 90C99
Mots-clés : Data Envelopment Analysis (DEA), Cost Efficiency (CE), competitive space, non-competitive space
Rezaei Hezaveh, Elham 1 ; Fallahnejad, Reza 1 ; Sanei, Masoud 1 ; Izadikhah, Mohammad 1

1 
@article{RO_2019__53_5_1563_0,
     author = {Rezaei Hezaveh, Elham and Fallahnejad, Reza and Sanei, Masoud and Izadikhah, Mohammad},
     title = {Development of a new cost {PPS} and decomposition of observed actual cost for {DMU} in a non-competitive space in {DEA}},
     journal = {RAIRO - Operations Research - Recherche Op\'erationnelle},
     pages = {1563--1580},
     publisher = {EDP-Sciences},
     volume = {53},
     number = {5},
     year = {2019},
     doi = {10.1051/ro/2019068},
     mrnumber = {4016532},
     zbl = {1432.90070},
     language = {en},
     url = {http://archive.numdam.org/articles/10.1051/ro/2019068/}
}
TY  - JOUR
AU  - Rezaei Hezaveh, Elham
AU  - Fallahnejad, Reza
AU  - Sanei, Masoud
AU  - Izadikhah, Mohammad
TI  - Development of a new cost PPS and decomposition of observed actual cost for DMU in a non-competitive space in DEA
JO  - RAIRO - Operations Research - Recherche Opérationnelle
PY  - 2019
SP  - 1563
EP  - 1580
VL  - 53
IS  - 5
PB  - EDP-Sciences
UR  - http://archive.numdam.org/articles/10.1051/ro/2019068/
DO  - 10.1051/ro/2019068
LA  - en
ID  - RO_2019__53_5_1563_0
ER  - 
%0 Journal Article
%A Rezaei Hezaveh, Elham
%A Fallahnejad, Reza
%A Sanei, Masoud
%A Izadikhah, Mohammad
%T Development of a new cost PPS and decomposition of observed actual cost for DMU in a non-competitive space in DEA
%J RAIRO - Operations Research - Recherche Opérationnelle
%D 2019
%P 1563-1580
%V 53
%N 5
%I EDP-Sciences
%U http://archive.numdam.org/articles/10.1051/ro/2019068/
%R 10.1051/ro/2019068
%G en
%F RO_2019__53_5_1563_0
Rezaei Hezaveh, Elham; Fallahnejad, Reza; Sanei, Masoud; Izadikhah, Mohammad. Development of a new cost PPS and decomposition of observed actual cost for DMU in a non-competitive space in DEA. RAIRO - Operations Research - Recherche Opérationnelle, Tome 53 (2019) no. 5, pp. 1563-1580. doi : 10.1051/ro/2019068. http://archive.numdam.org/articles/10.1051/ro/2019068/

[1] A. Ashrafi and M.M. Kaleibar, Cost, revenue and profit efficiency models in generalized fuzzy data envelopment analysis. Fuzzy Inf. Eng. 9 (2017) 237–246. | DOI | MR

[2] K. Ayouba, J.P. Boussemart, H.B. Lefer, H. Leleu and R. Parvulescu, A measure of price advantage and its decomposition into output-and input-specific effects. Eur. J. Oper. Res. 276 (2019) 688–698. | DOI

[3] V. Bilotkach, S. Gitto, R. Jovanović, J. Mueller and E. Pels, Cost-efficiency benchmarking of European air navigation service providers. Transp. Res. Part A: Policy Pract. 77 (2015) 50–60.

[4] A.S. Camanho and R.G. Dyson, A generalisation of the Farrell cost efficiency measure applicable to non-fully competitive settings. Omega 36 (2008) 147–162. | DOI

[5] A.S. Camanho and R.G. Dyson, Cost efficiency measurement with price uncertainty: a DEA application to bank branch assessments. Eur. J. Oper. Res. 161 (2005) 432–446. | DOI | Zbl

[6] G. Cesaroni, Industry cost efficiency in data envelopment analysis. Soc.-Econ. Planning Sci. 61 (2018) 37–43. | DOI

[7] A. Charnes, W.W. Cooper and E. Rhodes, Measuring the efficiency of decision-making units. Eur. J. Oper. Res. 3 (1979) 339. | DOI | Zbl

[8] G. Chortareas, G. Kapetanios and A. Ventouri, Credit market freedom and cost efficiency in US state banking. J. Empirical Finance 37 (2016) 173–185. | DOI

[9] H.A. Cinemre, V. Ceyhan, M. Bozoğlu, K. Demiryürek and O. Klç, The cost efficiency of trout farms in the Black Sea Region, Turkey. Aquaculture 251 (2006) 324–332. | DOI

[10] W.W. Cooper, L.M. Seiford and K. Tone, Data envelopment analysis: a comprehensive text with models, applications, references and DEA-solver software. Springer Science & Business Media. New York, USA (2007). | DOI | Zbl

[11] S. De Jaeger and N. Rogge, Cost-efficiency in packaging waste management: the case of Belgium. Resour. Conserv. Recycl. 85 (2014) 106–115. | DOI

[12] N. Ederer, Evaluating capital and operating cost efficiency of offshore wind farms: a DEA approach. Renew. Sustainable Energy Rev. 42 (2015) 1034–1046. | DOI

[13] L. Fang and H. Li, Lower bound of cost efficiency measure in DEA with incomplete price information. J. Product. Anal. 40 (2013) 219–226. | DOI

[14] L. Fang and H. Li, Cost efficiency in data envelopment analysis under the law of one price. Eur. J. Oper. Res. 240 (2015) 488–492. | DOI | MR | Zbl

[15] R. Färe, S. Grosskopf and C.A.K. Lovell, The Measurement of Efficiency of Production Kluwer. Nijhoff Publishing (1985). | DOI

[16] M.J. Farrell, The measurement of productive efficiency. J. R. Stat. Soc. Ser. A (General) 120 (1957) 253–290. | DOI

[17] M. Ghiyasi, Inverse DEA based on cost and revenue efficiency. Comput. Ind. Eng. 114 (2017) 258–263. | DOI

[18] B. Hampf, Cost and environmental efficiency of US electricity generation: accounting for heterogeneous inputs and transportation costs. Energy 163 (2018) 932–941. | DOI

[19] G.R. Jahanshahloo, M. Soleimani-Damaneh and A. Mostafaee, Cost efficiency analysis with ordinal data: a theoretical and computational view. Int. J. Comput. Math. 84 (2007) 553–562. | DOI | MR | Zbl

[20] G.R. Jahanshahloo, M. Soleimani-Damaneh and A. Mostafaee, A simplified version of the DEA cost efficiency model. Eur. J. Oper. Res. 184 (2008) 814–815. | DOI | Zbl

[21] H.A. Kader, M. Adams, P. Hardwick and W.J. Kwon, Cost efficiency and board composition under different takaful insurance business models. Int. Rev. Financial Anal. 32 (2014) 60–70. | DOI

[22] A. Mostafaee and F.H. Saljooghi, Cost efficiency measures in data envelopment analysis with data uncertainty. Eur. J. Oper. Res. 202 (2010) 595–603. | DOI | Zbl

[23] M.R. Mozaffari, P. Kamyab, J. Jablonsky and J. Gerami, Cost and revenue efficiency in DEA-R models. Comput. Ind. Eng. 78 (2014) 188–194. | DOI

[24] M.C.A.S. Portela and E. Thanassoulis, Economic efficiency when prices are not fixed: disentangling quantity and price efficiency. Omega 47 (2014) 36–44. | DOI

[25] B.K. Sahoo, M. Mehdiloozad and K. Tone, Cost, revenue and profit efficiency measurement in DEA: a directional distance function approach. Eur. J. Oper. Res. 237 (2014) 921–931. | DOI | MR | Zbl

[26] R.K. Shiraz, H. Fukuyama, M. Tavana and D. Di Caprio, An integrated data envelopment analysis and free disposal hull framework for cost-efficiency measurement using rough sets. Appl. Soft Comput. 46 (2016) 204–219. | DOI

[27] E. Thanassoulis, D. Sotiros, G. Koronakos and D. Despotis, Assessing the cost-effectiveness of university academic recruitment and promotion policies. Eur. J. Oper. Res. 264 (2018) 742–755. | DOI | MR | Zbl

[28] M. Toloo, A cost efficiency approach for strategic vendor selection problem under certain input prices assumption. Measurement 85 (2016) 175–183. | DOI

[29] K. Tone, A strange case of the cost and allocative efficiencies in DEA. J. Oper. Res. Soc. 53 (2002) 1225–1231. | DOI | Zbl

[30] K. Tone and M. Tsutsui, Decomposition of cost efficiency and its application to Japanese-US electric utility comparisons. Soc.-Econ. Planning Sci. 41 (2007) 91–106. | DOI

[31] A. Venkatesh and S. Kushwaha, Short and long-run cost efficiency in Indian public bus companies using Data Envelopment Analysis. Soc.-Econ. Planning Sci. 61 (2018) 29–36. | DOI

Cité par Sources :