Ranking decision making units based on the multi-directional efficiency measure

Abstract

This paper presents a new DEA ranking approach based on the multi-directional efficiency measure (MEM). The advantage of an MEM-based ranking is that it considers all the possible improvement directions for each decision-making unit (DMU) and does not rely on just one specific improvement direction for ranking. To rank efficient DMUs, all of which have an MEM efficiency score of unity, a multi-directional super-efficiency measure (MSEM) is considered. This allows the ranking of all efficient and inefficient units. The proposed ranking method is always feasible and does not need any prior information. The proposed method is applied to a real-life dataset, and the results are compared with those of three other state-of-the-art ranking methods.

Keywords:

• Data envelopment analysis
• ranking
• multi-directional efficiency measure
• multi-directional super-efficiency measure
• Monte Carlo method

Acknowledgements

This work is supported by Natural Sciences and Engineering Research Council of Canada (NSERC). Sebastián Lozano acknowledges the financial support of the Spanish Ministry of Science, Innovation and Universities.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work is funded by Natural Sciences and Engineering Research Council of Canada (NSERC) and the Spanish Ministry of Science, Innovation and Universities.