An equitable DEA-based approach for assigning fixed resources along with targets

Abstract

A typical problem in organization management is how to divide a fixed resource along with a target among decision making units (DMUs) of an organization equitably. By using the data envelopment analysis technique, this paper concerns the problem from the perspective of efficiency analysis and proposes a new sharing model. In the proposed method, the fixed resource and target are divided among DMUs such that the efficiencies of DMUs remain unchanged after assigning the fixed cost and target. The proposed method is unit-invariant; it eliminates resource waste and target insufficiency brought by slacks. Also, every DMU is assigned a positive resource and a positive target under this method. Two corresponding algorithms are designed to yield a unique allocation. The proposed approach can be developed under both constant returns to scale and variable returns to scale. Two examples are presented to illustrate the validity and superiorities of our method.

Keywords:

• data envelopment analysis
• fixed resource allocation
• target setting
• efficiency
• units-invariance

Acknowledgements

This work is supported by the National Natural Science Foundation of China (Grant Nos. 11301395, 11201344, 11571270, and 71371152).