Fixed cost allocation in two-stage system in the presence of undesirable outputs
Subject Areas : International Journal of Data Envelopment AnalysisLeila Emami 1 , Farhad Hosseinzadeh Lotfi 2 , Mohsen Rostamy 3
1 - Department of Mathematics, Science and Research Branch, Islamic Azad University, Tehran, Iran
2 - Department of Mathematics, Science and Research branch, Islamic Azad University, Tehran, Iran.
3 - Department of Mathematics, science and research Branch, Islamic Azad University, Tehran, Iran
Keywords: Network Data Envelopment Analysis, Fixed Cost Allocation, Undesirable Outputs.,
Abstract :
Data Envelopment Analysis (DEA) is a mathematical programming-based technique used to determine the efficiency of a set of homogeneous decision-making units (DMUs). In certain cases, these units operate as a multi-stage process, where the outputs of one stage serve as inputs for the next. Such a structure is particularly common in production lines of industrial and manufacturing systems, where raw materials are used as inputs in the first stage, and the desired product is progressively completed through various stages, with the final product being the main output in the last stage. In most production activities and daily operations, besides desirable outputs, undesirable outputs such as harmful emissions, production waste, etc., are also generated. As a result, numerous studies in economics, management, and production emphasize reducing energy consumption to protect the environment and control pollution. In this paper, a new model is proposed that includes undesirable outputs and allocates fixed costs within networks. The focus of these models is to design approaches for allocating fixed costs where the reduction ratio of undesirable outputs is higher than that of desirable outputs.
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