Resource allocation based on cost efficiency

Research output: Contribution to journalArticleScientificpeer-review

Researchers

Research units

  • Kharazmi University
  • University of Southern Denmark
  • Shahrood University of Technology

Abstract

In this paper, we consider a resource allocation (RA) problem and develop an approach based on cost (overall) efficiency. The aim is to allocate some inputs among decision making units (DMUs) in such way that their cost efficiencies improve or stay unchanged after RA. We formulate a multi-objective linear programming problem using two different strategies. First, we propose an RA model which keeps the cost efficiencies of units unchanged. This is done assuming fixed technical and allocative efficiencies. The approach is based on the assumption that the decision maker (DM) may not have big changes in the structure of DMUs within a short term. The second strategy does not impose any restrictions on technical and allocative efficiencies. It guarantees that none of the cost efficiencies of DMUs get worse after RA, and the improvement for units is possible if it is feasible and beneficial. Two numerical examples and an empirical illustration are also provided.

Details

Original languageEnglish
Pages (from-to)1279-1289
Number of pages11
JournalJournal of the Operational Research Society
Volume68
Issue number10
Publication statusPublished - 1 Oct 2017
MoE publication typeA1 Journal article-refereed

    Research areas

  • allocative efficiency, cost efficiency, data envelopment analysis, overall efficiency, resource allocation, technical efficiency

ID: 15340705