Projections of inefficient DMU to efficient frontier
by
Valter Boljunèić
University of Rijeka, Faculty of Economics and Tourism "Dr. Mijo Mirkoviæ", Pula

Usually, when we apply DEA models, and DMU under evaluation results as inefficient we obtain single efficient reference point which Pareto dominates DMU under evaluation. This point can also be interpreted as target point on the frontier such that inefficient DMU should adopt its input/output mix to became efficient. In this work we are interested in part of the efficient frontier of production possibility set that can be used as a set of reference points for inefficient DMU. These points are obtained from DMU under evaluation applying changes, which form polyhedral cone, to its inputs and outputs. We apply modified LP to obtain one projection point on the frontier of production possibility set along one of the edges of the cone of possible changes. Using relationship between primal and dual program and applying parametric programming, where only RHS is changed, we obtain desired subset of the efficient frontier.

Date received: May 16, 2000

Copyright © 2000 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # caex-84.