On the Violation of Convexity and Returns to Scale Assumptions in Fixed Cost Allocation (FCA) within the DEA Framework

Subject Areas : International Journal of Data Envelopment Analysis

Mohammad Erahim Amin Ghafoori ¹ , Farzad Rezai balf ^{2 *} , Reza Shahverdi ³

1 - شهرداری مشهد
2 - Department of Mathematics Building, Qaimshahr Branch, Islamic Azad University, Qaimshahr, Iran
3 - عضو هیات علمی دانشگاه ازاد قایمشهر

Received: 2025-08-23 Accepted : 2025-10-05 Published : 2025-07-04

Keywords: Fixed Cost Allocation, Data Envelopment Analysis, Returns to Scale, Convexity Principle.,

Abstract :

Fixed Cost Allocation (FCA) among Decision Making Units (DMUs) is one of the essential requirements in both private organizations and public sectors. Data Envelopment Analysis (DEA) has achieved remarkable success in this field and gained a distinguished position among researchers. On the other hand, one of the fundamental principles on which DEA is based is the principle of convexity and returns to scale. This principle has not been considered in FCA problems. In this paper, we demonstrate that in FCA, the principles of convexity and returns to scale change. The obtained results are illustrated by a numerical example.

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