Profit Efficiency Evaluation: A composed Approach of DEA and multi- objective programming

Subject Areas : Operation Research

Mahnaz Maghbouli ¹ , Soheila Seyyedboveir ² , Fatemeh Mehrgan ³

1 - دانشگاه آزاد اسلامی، واحد ارس، جلفا، ایران
2 - گروه ریاضی، دانشگاه آزاد اسلامی واحد آبادان. خوزستان، ایران.
3 - دانشگاه آزاد اسلامی واحد آبادان، آبادان، ایران

Received: 2024-02-08 Accepted : 2024-02-11 Published : 2024-02-11

Keywords: Data Envelopment Analysis (DEA), Profit Efficiency, Multi-objective Programming, Min Max Weighted Approach.,

Abstract :

Data envelopment analysis (DEA) is a nonparametric method for evaluating the relative efficiency of decision making units (DMUs) described by multiple inputs and multiple outputs. The issue of measuring the cost, revenue and profit efficiency in manufacturing and economic systems is one of the most challenging issues for managers. This research, is an attempt to apply Data envelopment analysis and multi-objective programming in order to evaluate the profit efficiency of DMUs with the perspective of employment in banking sector. In order to address the issue, the proposed model employed the current values of cost and revenue efficiency in a way not only the cost and revenue scores are as close as possible to their best scores but also as far as possible from their worst values. In this case, the evaluated profit efficiency is fairer than compared with the existing methods. Furthermore, the proposed method can distinguish the differences of units which was evaluated as profit- efficient with the standard evaluation and may open some avenues to resolve the inefficiency sources. To illustrate the applicability of the proposed method a real case of Iranian bank was explored.