The purpose of this paper is to develop an approach to a resource-allocation problem that typically appears in organizations with a centralized decision-making environment, for example, supermarket chains, banks, and universities. The central unit is assumed to be interested in maximizing the total amount of outputs produced by the individual units by allocating available resources to them. We will develop an interactive formal approach based on data envelopment analysis (DEA) and multiple-objective linear programming (MOLP) to find the most preferred allocation plan. The units are assumed to be able to modify their production in the current production possibility set within certain assumptions. Various assumptions are considered concerning returns to scale and the ability of each unit to modify its production plan. Numerical examples are used to illustrate the approach.resource allocation, data envelopment analysis, frontier analysis, multiple-objective linear programming
Halme et al., Management Science, 45, 103–115 (1999) have proposed Value Efficiency Analysis as an approach to incorporate preference information in Data Envelopment Analysis (DEA). Generally, a value function includes only ordinal information and thus a value efficiency score does not provide information on the value difference. The score only describes the improvements in the input/output values that are needed in order to make the Decision-Making Unit (DMU) as preferred as the Most Preferred Solution (MPS). This Paper discusses two sets of additional assumptions that enable us to give the efficiency score a value difference interpretation. Copyright Springer Science+Business Media, Inc. 2005data envelopment analysis, directional distance function, value function,
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