Title: Sensitivity analysis of ranking decision making units in data envelopment analysis

Authors: Hadi Shirouyehzad; F. Hosseinzadeh Lotfi; Reza Dabestani

Addresses: Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran ' Department of Mathematics, Science and Research Branch, Islamic Azad University, Tehran, Iran ' Department of Management and Economics, Tarbiat Modares University, Jalal Ale Ahmad Ave., P.O. Box 14115-337, Tehran, Iran

Abstract: Data envelopment analysis, as a mathematical approach, has been extensively used for measuring efficiency of units. A number of methods have been presented in order to rank efficient units and sensitivity analysis of efficient and inefficient decision making units (DMU). In this paper, a method is proposed for analysing stability radius of efficient units' rank based on an ideal virtual DMU as a benchmark. Therefore, in the following, a method is developed to analyse the sensitivity of ranking units in the form of constant return to scale. Two important advantages of this algorithm are the possibility of determining stability radius for an efficient DMU with a specified rank and improving inputs and outputs in order to move toward a better rank. The findings of this method may help managers to make an appropriate management decision in a competitive market place. Finally, a numerical example is presented to describe the proposed sensitivity analysis of ranking method.

Keywords: data envelopment analysis; DEA; sensitivity analysis; efficiency ranking; benchmarking; stability radius; decision making units; DMUs.

DOI: 10.1504/IJMOM.2013.052054

International Journal of Modelling in Operations Management, 2013 Vol.3 No.1, pp.20 - 30

Received: 12 Apr 2012
Accepted: 16 Jun 2012
Published online: 29 Jan 2014 *

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