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Resource Allocation and Target Setting in DEA with Preservation of Ranking Scheme
Abstract
Existing data envelopment analysis (DEA) approaches for resource allocation and target setting are based on the assumption of the maintenance or improvement of efficiency. Some problems are not addressed if the assumption is made; however, controlling changes of rank status can aid such a resource allocation analysis. Therefore, this paper concentrates on the issue of units rank in such problem for succeeding production seasons, during which information about demand and supply is available. It provides mathematical formulations within the DEA framework to preserve the rank score of the units after shifting in the input and output levels. The approach is applied to plan units for 14 gas companies consisting of two inputs and three outputs. It gains results to establish the stability in preserving ranks of new units. After arranging the companies, it is shown that the model can also preserve some extent the stability of the other ranking approaches used in the application.
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