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Optimization
A Journal of Mathematical Programming and Operations Research
Volume 59, 2010 - Issue 7
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Original Articles

A Euclidean distance-based measure of efficiency in data envelopment analysis

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Pages 985-996 | Received 20 May 2008, Accepted 08 Mar 2009, Published online: 09 Dec 2009
 

Abstract

Data envelopment analysis (DEA) has been proven as an excellent data-oriented performance evaluation method when multiple inputs and outputs are present in a set of peer decision-making units (DMUs). Several efficiency measures have been proposed in the DEA literature, see, for instances, radial efficiency measure of Charnes et al. (CCR)(A. Charnes. W.W. Cooper, and E. Rhodes, 1978. Measuring the efficiency of decision making units. Eur. J. Oper. Res. 2, 429–444), Russell graph measure (J.T. Russell, and R. Sirvant. 1999. An enhanced DEA Russell graph efficiency measure. Eur. J. Oper. Res. 115, pp. 596–607) and slack-based measure of Tone (K. Tone, 2001. A slack-based measure of efficiency in DEA. Eur. J. Oper. Res. 130, p. 498–509). In this article, we will propose an Euclidean distance-based measure of efficiency. Then, in order to discriminate the performance of efficient DMUs, an alternative super-efficiency DEA model is proposed. The applicability of the models developed is illustrated in the context of the analysis of gas companies performance.

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