Ranking Two-Stage Production Units in Data Envelopment Analysis

In this paper, we propose a new approach to rank two-stage production systems in data envelopment analysis based on performance of the stages. To do this, a method is devised to compare the stages performance of a special two-stage unit with the corresponding stages performance of other units. The relative performance of two-stage production units is investigated under new definitions of weak and strong relations and a new ranking criterion is introduced as the result. The most important features of our method is the ability to achieve ranking intervals for two-stage production units based on the introduced relations over all feasible weights, as well as the ability to generate accurate information about sources of inefficiency of two-stage production units.