Resource allocation of a parallel system with interaction consideration using a DEA approach: an application to Chinese input–output table

ABSTRACT

Resource allocation is a popular and important issue in the enterprise management. Recently, data envelopment analysis (DEA) as a non-parametric method for measuring the performance of decision-making units (DMUs) has brought a new flavour to this issue. However, most of resource allocation works by DEA focused on single stage system or consider the internal production process of the system as a ‘black box.’ With the competition and relation among economic entities enhance, the system becomes more and more complex and interactive. To go inside the ‘black box’, in this paper, we propose a new DEA approach to allocate the resource in a bidirectional interactive parallel system. We consider not only the resource allocation of a certain DMU, but also the resource allocation of all DMUs for a centralized decision maker through centralized models. Moreover, the leader–follower relationship between two subunits is studied by a non-cooperative model as a theoretical extension. Finally, the approach is applied to Chinese input–output table in the cooperation scenario. We compare our approach with the traditional approach and find that it can obtain more potential gains.

KEYWORDS:

• Data envelopment analysis
• resource allocation
• parallel system
• interactive unit
• potential gains

Acknowledgments

We thank the two anonymous reviewers for their valuable and constructive comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

The research is supported by National Natural Science Foundation of China [grant number 71501189], [grant number 71571173], [grant number 71631008], Natural Science Foundation of Hunan Province [grant number 2017JJ3397], the open project of “Mobile Health” Ministry of Education, China Mobile Joint Laboratory of Central South University, Top-Notch Young Talents Program of China, Research Fund for the Doctoral Program of Higher Education of China [grant number 20133402110028] and Foundation for the Author of National Excellent Doctoral Dissertation of P. R. China [grant number 201279].