Title: Flexible target setting in mergers using inverse data envelopment analysis

Authors: Gholam R. Amin; Amar Oukil

Addresses: Department of Operations Management and Business Statistics, College of Economics and Political Science, Sultan Qaboos University, Oman ' Department of Operations Management and Business Statistics, College of Economics and Political Science, Sultan Qaboos University, Oman

Abstract: In a merger, one important issue is the estimation of the levels of inputs and outputs required from each merging decision-making unit (DMU) so that the merged entity can realise a desired efficiency target. This paper uses the potential of inverse data envelopment analysis (InvDEA) to build a flexible target setting of the inputs and outputs. This study expands the application of the InvDEA methodology in a merger by introducing a flexible target setting that allows the decision maker to favour specific input in the target setting. We use a dataset of 30 universities to illustrate the practical scope of the proposed flexible target setting method, which can obviously be employed in any other merging context.

Keywords: data envelopment analysis; DEA; inverse data envelopment analysis; InvDEA; mergers; multiple optimal solutions; flexible target setting.

DOI: 10.1504/IJOR.2019.101196

International Journal of Operational Research, 2019 Vol.35 No.3, pp.301 - 317

Received: 29 Dec 2015
Accepted: 03 Jul 2016
Published online: 29 Jul 2019 *

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