A linear formulation of the two-level DEA model |
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Authors: | Chiang Kao |
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Institution: | aDepartment of Industrial and Information Management, National Cheng Kung University, Tainan, Taiwan, Republic of China |
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Abstract: | In efficiency measurement, the input and output factors of similar characteristics can be grouped into input and output categories, respectively, using a weighted-average approach under the data envelopment analysis (DEA) framework to form a two-level DEA model. The resulting two-level model is nonlinear. This note transforms the nonlinear model into a linear one using a variable substitution technique. Linear models are easier to solve than their nonlinear counterparts. The linear transformation is applicable to the two-level model built from both the primal and dual forms of the conventional one-level DEA model. The linear model transformed from the nonlinear model developed from the primal form has a dual which is equivalent to the nonlinear model developed from the dual form. |
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Keywords: | Data envelopment analysis Efficiency Two-level model Weight restriction |
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