Title: Making an ideal decision-making unit using virtual network data envelopment analysis approach

Authors: Saeed Yousefi; Hadi Shabanpour; Reza Farzipoor Saen; Gholam Reza Faramarzi

Addresses: Faculty of Management and Accounting, Department of Industrial Management, Allameh Tabatabaei University, Tehran, Iran ' Young Researchers and Elite Club, Karaj Branch, Islamic Azad University, Karaj, Iran ' Faculty of Management and Accounting, Department of Industrial Management, Karaj Branch, Islamic Azad University, P.O. Box 31485-313, Karaj, Iran ' Faculty of Management and Accounting, Department of Industrial Management, Karaj Branch, Islamic Azad University, P.O. Box 31485-313, Karaj, Iran

Abstract: Data envelopment analysis (DEA) is a tool for measuring the relative efficiency of decision-making units (DMUs) that perform similar tasks. One of the uses of the DEA is the establishment of benchmarks for inefficient DMUs. These benchmarks play the role of target for inefficient DMUs. However, traditional DEA (TDEA) models fail to rank the efficient DMUs, and as a result, they cannot determine a benchmark for the inefficient DMUs. To overcome this shortcoming, this paper proposes virtual network DEA (NDEA) approach. The proposed method not only ranks the whole inefficient and efficient DMUs but also establishes a virtual benchmark called ideal DMU. The case study demonstrates the applicability of the proposed model.

Keywords: network DEA; data envelopment analysis; ideal DMUs; decision making units; relative efficiency; virtual benchmarking; virtual networks; virtual DEA; case study; best practice; DMU efficiency.

DOI: 10.1504/IJBPM.2014.065018

International Journal of Business Performance Management, 2014 Vol.15 No.4, pp.316 - 328

Received: 05 Aug 2013
Accepted: 28 Apr 2014

Published online: 30 Sep 2014 *

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