A minimax approach for selecting the overall and stage-level most efficient unit in two stage production processes

• Published in: Annals of operations research Vol. 300; no. 1; pp. 137 - 169
• Main Authors: Özsoy, Volkan Soner, Örkcü, Mediha, Örkcü, H. Hasan
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.05.2021; Springer; Springer Nature B.V
• Subjects: Business and Management; Combinatorics; Data envelopment analysis; Decision making; Decision-making, Group; Integer programming; Methods; Minimax technique; Mixed integer; Operations research; Operations Research/Decision Theory; Original Research; Production management; Recursive programming; Technology application; Theory of Computation; Turkey; Most efficient DMU; Minimax model; Data envelopment analysis; Two-stage production systems
• ISSN: 0254-5330; 1572-9338
• DOI: 10.1007/s10479-020-03827-x

Data envelopment analysis (DEA) is a very effective management tool in assessing the performance of a set of decision making units (DMUs). In the efficiency evaluation using classic single stage DEA models, the internal processes of the DMUs are often neglected. In most real-world problems, it may be more realistic to evaluate the efficiency evaluation in two-stage production systems. In some cases: however, the decision-maker must need to identify the most efficient single unit. Numerous methods have been introduced to find the most efficient unit in single stage systems whereas no methods have been proposed for this aim in two stage production systems. Therefore, a new model based on mixed-integer programming was proposed to determine the most efficient DMU in two-stage systems and sub-stages in this study. The most important innovation of the suggested approach is that the most efficient DMUs of both stages can be found separately using only one model. Numerical examples for real world problems and a simulation study were provided for the validity of the proposed model.