Extending Allocation Stages of Fixed Costs Between Decision Making Units Using DEA
Subject Areas : Fuzzy Optimization and Modeling Journal
Hassan Rostamzadeh
1
(Optimization, Mathematics,Shiraz university of technology,Shiraz,Iran)
Ali Reza Fakharzadeh Jahromi
2
(Department OR, Faculty of Mathematics, Shiraz University of Technology, Shiraz, Iran)
Keywords: Data envelopment analysis, Efficiency, Fixed costs, Multi-stage NDEA allocation,
Abstract :
A good idea for a decision maker to protect and increase the efficiency of the decision-making units (DMUs) in an organization, is to allocate the fixed costs between them based on their efficiencies. Since, data envelopment analysis (DEA) is a suitable method to calculate the efficiency, allocating fixed costs to DMUs based on the two-stage network DEA (NDEA) approach is done by researchers. But due to some limitations (like producing a product in several steps, receiving incomes in several stages and etc) and some organization necessities, it is impossible to do this allocation just in two-stages. In this paper, we suggest a model for allocating the fixed cost among DMUs in more than two-stage network DEA approach, so that more than allocating the fixed cost, increasing in efficiency is also considered. Also, a benchmark example in reality is presented to illustrate the model and its applications.