Using lexicographic parametric programming for identifying efficient units in DEA

Authors:
Pekka J. Korhonen;Pyry-Antti Siitari
Affiliations:
Department of Economics and Management Science, Helsinki School of Economics P.O. Box 1210, 00101 Helsinki, Finland;Department of Economics and Management Science, Helsinki School of Economics P.O. Box 1210, 00101 Helsinki, Finland
Venue:
Computers and Operations Research
Year:
2007

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Abstract

In this paper, we propose the use of lexicographic parametric programming to recognize efficient units in data envelopment analysis (DEA). By using the parameterization of the right-hand side vector of the envelopment problem, we obtain the efficiency curve which is traversing through the efficient frontier from unit to unit. The units in the basis with any parameter value are efficient and the unit dominated by a point on an efficient facet is inefficient. Lexicographic parametric programming is needed to guarantee that all units to be considered are efficient-not only weakly efficient.