TY - GEN
T1 - Most Favorable Russell Measures of Efficiency
T2 - 19th International Conference on Mathematical Optimization Theory and Operations Research, MOTOR 2020
AU - Kao, Chiang
N1 - Funding Information:
This research was partially supported by the Ministry of Science and Technology of the Republic of China (Taiwan), under grant MOST108-2410-H-006-102-MY3.
Publisher Copyright:
© 2020, Springer Nature Switzerland AG.
PY - 2020
Y1 - 2020
N2 - Conventional radial efficiency measurement models in data envelopment analysis are unable to produce appropriate efficiency scores for production units lying outside the cone generated by the convex hull of the extreme efficient production units. In addition, in the case of production technologies with variable returns to scale, the efficiency scores measured from the input and output sides are usually different. To solve these problems, the Russell measure of efficiency, which takes both the inputs and outputs into account, has been proposed. However, the conventional Russell efficiency is measured under the least favorable conditions, rather than the general custom of measuring under the most favorable ones. This paper develops a model to measure Russell efficiency under the most favorable conditions in two forms, the average and the product. They can be transformed into a second-order cone program and a mixed integer linear program, respectively, so that the solution can be obtained efficiently. A case of Taiwanese commercial banks demonstrates that they are more reliable and representative than the radial measures. Since the most favorable measures are higher than the least favorable measures, and the targets for making improvements are the easiest to reach, they are more acceptable to the production units to be evaluated.
AB - Conventional radial efficiency measurement models in data envelopment analysis are unable to produce appropriate efficiency scores for production units lying outside the cone generated by the convex hull of the extreme efficient production units. In addition, in the case of production technologies with variable returns to scale, the efficiency scores measured from the input and output sides are usually different. To solve these problems, the Russell measure of efficiency, which takes both the inputs and outputs into account, has been proposed. However, the conventional Russell efficiency is measured under the least favorable conditions, rather than the general custom of measuring under the most favorable ones. This paper develops a model to measure Russell efficiency under the most favorable conditions in two forms, the average and the product. They can be transformed into a second-order cone program and a mixed integer linear program, respectively, so that the solution can be obtained efficiently. A case of Taiwanese commercial banks demonstrates that they are more reliable and representative than the radial measures. Since the most favorable measures are higher than the least favorable measures, and the targets for making improvements are the easiest to reach, they are more acceptable to the production units to be evaluated.
UR - http://www.scopus.com/inward/record.url?scp=85087774357&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85087774357&partnerID=8YFLogxK
U2 - 10.1007/978-3-030-49988-4_29
DO - 10.1007/978-3-030-49988-4_29
M3 - Conference contribution
AN - SCOPUS:85087774357
SN - 9783030499877
T3 - Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
SP - 424
EP - 439
BT - Mathematical Optimization Theory and Operations Research - 19th International Conference, MOTOR 2020, Proceedings
A2 - Kononov, Alexander
A2 - Khachay, Michael
A2 - Kalyagin, Valery A.
A2 - Pardalos, Panos
PB - Springer
Y2 - 6 July 2020 through 10 July 2020
ER -