Efficiency measurement for hierarchical network systems |
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| Affiliation: | 1. Division of Business Administration, Sunmoon University, Tangjeong-myeon, Asan, Chungnam 336-708, Korea;2. Department of Logistics, Service & Operations Management, Korea University Business School, Anam-dong, Seongbuk-gu, Seoul 136-701, Korea;1. School of Management, University of Science and Technology of China, Hefei, Anhui Province 230026, PR China;2. School of Business, Anhui University, Hefei, Anhui Province 230026, PR China;3. Hefei University of Technology, Hefei, Anhui Province 230026, PR China;1. Donders Institute for Brain, Cognition and Behaviour, Radboud University, Nijmegen, The Netherlands;2. Kavli Institute for Systems Neuroscience, Centre for Neural Computation, The Egil and Pauline Braathen and Fred Kavli Centre for Cortical Microcircuits, NTNU, Norwegian University of Science and Technology, St. Olavs Hospital, Trondheim, Norway |
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| Abstract: | ![]()
The conventional data envelopment analysis (DEA) models for measuring the relative efficiency of a set of decision making units (DMUs), without considering the operations of the component processes, often produce misleading results, and network models have thus been recommended. This paper discusses the development of a network DEA model for systems with a hierarchical structure. It is shown that the hierarchical structure is equivalent to a parallel structure, with the components being the units at the bottom of the hierarchy. Due to the characteristics of a parallel system, the efficiency of a hierarchical system is thus a weighted average of those of the units at the bottom of the hierarchy. A hypothetic example shows that the proposed model is able to distinguish the order of the efficient DMUs evaluated by the conventional DEA model. Moreover, it provides the efficiencies of the functions of the DMU, which enables managers to identify areas of weakness, and thus better focus efforts to improve overall performance. |
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| Keywords: | Data envelopment analysis Network Hierarchy Efficiency |
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