CENTRALIZED DATA ENVELOPMENT FOR EFFICIENCY ANALYSIS

For purposes of performace evaluation of the decision-making units (DMUs) in a given system, the efficiency frontier can be identified by existing data envelopment methodologies. It may be composed of one (global) or several (local) efficiency facets. An efficiency facet directly influences the performance rating of a DMU. If there are efficiency scores which are based on at least two different (local) facets, then the DMUs cannot be globally comparable. This paper proposes an algorithm for constructing a single-faceted efficiency frontier in order to permit global comparability. This can be useful where there is a central decision-making body which adheres to some unique standard for resource allocation and production projection.