Sensitivity and stability in stochastic data envelopment analysis

Abstract

Sensitivity and stability for Banker's model of Stochastic Data Envelopment Analysis (SDEA) is studied in this paper. In the case of the DEA model, necessary and sufficient conditions to preserve the efficiency of efficient decision-making units (DMUs) and the inefficiency of inefficient DMUs are obtained for different perturbations of data in the model. The cases of perturbations of all inputs, of perturbations of output and of the simultaneous perturbations of output and all inputs are considered. An illustrative example is provided.

Keywords:

• data envelopment analysis
• linear programming
• stochastic DEA model
• sensitivity and stability analysis
• perturbations of data
• preserving the efficiency and inefficiency of DMUs

Acknowledgements

This research was partly supported by Grant No. 067-0000000-1076 of the Ministry of Science, Education and Sports of the Republic of Croatia. The authors are grateful to two anonymous referees whose suggestions improved the paper.