Efficiency improvement based upon overall value judgment and weight restriction
Abstract
Purpose
The purpose of this paper is to consider the following problem: the authors consider a new constructed unit system to indicate the characteristics of the inputs and outputs of different decision-making units (DMUs) and propose several modified models to calculate their efficiencies based on overall value judgment and weight restriction in the production process.
Design/methodology/approach
This paper applies principal component analysis (PCA) to analyze the original value judgment information, and the key indices in the production process are extracted. The modified data envelopment analysis (DEA) models are proposed and DEA efficiencies and their projections are calculated.
Findings
By incorporate PCA and DEA, the authors propose new virtual DMUs composed of unique optimal multipliers of each DMU. Crucial indexes are extracted and the weights of inputs and output are ranked through using PCA by taking the preference and value judgments of all DMUs into consideration. Weight constraints from the ranking are utilized to improve the traditional CCR-DEA model. The empirical results validate the feasibility of the approach.
Practical implications
The method can be used in many organizations which have excessive amounts of inputs and outputs variables, such as banks, chain stores, car factory, etc.
Originality/value
This paper presents an integrated methodology of using PCA and DEA for considering the preferences of the inputs and outputs and value judgment of all DMUs and ranks the importance of the indicators from the overall perspectives.
Keywords
Acknowledgements
The authors thank the senior editor and two reviewers for their helpful comments. This work was supported by the National Natural Science Foundation of China (Grant No. 71001093, 71371008).
Citation
Zha, Y., Wang, J., Linlin, Z. and Liang, L. (2015), "Efficiency improvement based upon overall value judgment and weight restriction", Kybernetes, Vol. 44 No. 5, pp. 721-738. https://doi.org/10.1108/K-01-2015-0002
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited