TY - CHAP
T1 - Dea models incorporating uncertain future performance
AU - Chang, Tsung-Sheng
AU - Tone, Kaoru
AU - Wu, Chen Hui
PY - 2016/10/21
Y1 - 2016/10/21
N2 - Conventional data envelopment analysis (DEA) models are designed for measuring the productive efficiency of decision-making units (DMUs) based merely on historical data. However, in many practical applications, such past results are not sufficient for evaluating a DMU's performance in highly volatile operating environments, such as those with highly volatile crude oil prices and currency exchange rates. That is, in such environments, a DMU's whole performance may be seriously distorted if its future performance, which is sensitive to crude oil price volatility and/or currency fluctuations, is ignored in the evaluation process. However, despite its importance, to our knowledge, no DEA models have been proposed in the literature that explicitly take future performance volatility into account. Hence, this research aims at developing a new system of DEA models that incorporate a DMU's uncertain future performance, and thus can be applied to fully measure efficiency.
AB - Conventional data envelopment analysis (DEA) models are designed for measuring the productive efficiency of decision-making units (DMUs) based merely on historical data. However, in many practical applications, such past results are not sufficient for evaluating a DMU's performance in highly volatile operating environments, such as those with highly volatile crude oil prices and currency exchange rates. That is, in such environments, a DMU's whole performance may be seriously distorted if its future performance, which is sensitive to crude oil price volatility and/or currency fluctuations, is ignored in the evaluation process. However, despite its importance, to our knowledge, no DEA models have been proposed in the literature that explicitly take future performance volatility into account. Hence, this research aims at developing a new system of DEA models that incorporate a DMU's uncertain future performance, and thus can be applied to fully measure efficiency.
KW - Data envelopment analysis
KW - Dynamic
KW - Entropy
KW - Forecast
KW - Volatility
UR - http://www.scopus.com/inward/record.url?scp=85052174484&partnerID=8YFLogxK
U2 - 10.1002/9781118946688.ch30
DO - 10.1002/9781118946688.ch30
M3 - Chapter
AN - SCOPUS:85052174484
SN - 9781118946701
SP - 480
EP - 515
BT - Advances in DEA Theory and Applications
PB - Wiley-Blackwell
ER -