Title: A modified model for sensitivity analysis of inefficient DMUs in DEA: a case study in hotel industry

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

Addresses: Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Postal Code: 1477893855, Tehran, Iran ' Department of Mathematics, Science and Research Branches, Islamic Azad University, Postal Code: 1477893855, Tehran, Iran ' Department of Management and Economics, Tarbiat Modares University, Jalal Ale Ahmad Ave., P.O. Box 14115-337, Tehran, Iran

Abstract: Different models which have been introduced in data envelopment approach can help managers in decision making process in order to address efficient and inefficient units. But limited number of researches considers sensitivity analysis of enhanced efficiency. One of the important issues for a decision maker is to select an appropriate way to move an inefficient DMU toward efficiency frontier. In this paper a modified model is proposed to analyse sensitivity of inefficient units. In this model, instability radius of each inefficient DMU is determined in terms of variations in inputs and outputs. Also, management coefficients are applied to determine the possibility of variations in inputs and outputs variables. The main advantage of this model in comparison with other model is its flexibility in decision making process. Finally, the proposed model is examined in a case study in hotel industry to confirm the applicability of proposed model.

Keywords: data envelopment analysis; DEA; decision making units; inefficient DMUs; sensitivity analysis; management coefficient; hotel industry; modelling; efficiency; hotels.

DOI: 10.1504/IJOR.2014.058951

International Journal of Operational Research, 2014 Vol.19 No.2, pp.186 - 197

Available online: 25 Jan 2014 *

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