Theoretical Paper
Journal of the Operational Research Society (2004) 55, 1187–1193. doi:10.1057/palgrave.jors.2601785 Published online 24 June 2004
Sensitivity in data envelopment analysis using an approximate inverse matrix
- 1University of Zagreb, Zagreb, Croatia
- 2University of Pittsburgh, Pittsburgh, PA, USA
Correspondence: L Nerali
, Faculty of Economics, University of Zagreb, Kennedyev trg 6, Zagreb 10000, Croatia. E-mail: lneralic@efzg.hr
Received September 2002; Accepted March 2004; Published online 24 June 2004.
Abstract
In this paper, sensitivity analysis of the Charnes–Cooper–Rhodes model in data envelopment analysis (DEA) is studied for the case of perturbation of all outputs and of all inputs of an efficient decision-making unit (DMU). Using an approximate inverse of the perturbed optimal basis matrix, an approximate preservation of efficiency for an efficient DMU under these perturbations is considered. Sufficient conditions for an efficient DMU to preserve its efficiency are obtained in that case. An illustrative example is provided.
Keywords:
data envelopment analysis, efficiency, CCR model, optimal basis matrix inverse approximation, sensitivity analysis, linear programming
