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An Aggressive Formulation of Cross-efficiency in DEA  

Lim, Sung-Mook (고려대학교 경상대학 경영학부)
Publication Information
Journal of the Korean Operations Research and Management Science Society / v.33, no.4, 2008 , pp. 83-100 More about this Journal
Abstract
We propose a new aggressive formulation of cross-efficiency in Data Envelopment Analysis(DEA). In the traditional aggressive formulation, the efficiency score of a test DMU is maximized as the first goal while an average of efficiency scores of peer DMUs is minimized as the second goal. The proposed model replaces the second goal with the minimization of the best efficiency score of peer DMUs. We showed the model is a quasi-convex optimization problem, and for a solution method we developed a bisection method whose computational complexity is polynomial-time. We tested the model on 200 randomly generated DEA problems, and compared it with the traditional model in terms of various criteria. The experimental results confirmed the effectiveness and usefulness of the proposed model.
Keywords
Data Envelopment Analysis; Efficiency; Cross-efficiency;
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