Allocating fixed costs and target setting: A dea-based approach

Amirteimoori, Alireza; Kordrostami, Sohrab

doi:10.1016/j.amc.2005.01.064

Cited by 65 publications

(35 citation statements)

References 6 publications

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“…Amirteimoori and Kordrostami (2005) indicated that model (5), presented by Beasley, is infeasible in some cases and put forward their own method regarding the efficiency invariance principle describing the constraints of Beasley's method. In this section, first we will prove that the models presented by Beasley [models (4) and (5)] always have a feasible solution and finite optimal value.…”

Section: Beasley's Methodsmentioning

confidence: 99%

“…The method presented by Amirteimoori and Kordrostami (2005) is based on two principles: First, all units with common set of weights are allocated and second the efficiency score remains unchanged before and after allocation. Their model for fixed cost allocation among DMUs is as follows:…”

Section: The Failure Of Amirteimoori and Kordrostami's (2005) Methods mentioning

confidence: 99%

“…Then, we will state Beasley's allocation method whose infeasibility was claimed by Amirteimoori and Kordrostami (2005).…”

Section: Preliminariesmentioning

confidence: 99%

“…Du et al (2014) stated their method based on cross-efficiency concept. Amirteimoori and Kordrostami (2005) claimed that Beasley's method (2003) is infeasible in many cases. Then, they proposed an approach for the allocation of fixed cost and claimed in which both the efficiency invariance and common set of weights principles hold.…”

Section: Introductionmentioning

confidence: 99%

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Proposing a method for fixed cost allocation using DEA based on the efficiency invariance and common set of weights principles

2017

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One of the applications of data envelopment analysis is fixed costs allocation among homogenous decision making units. In this paper, we first prove that Beasley's method (Eur J Oper Res 147(1):198-216, 2003), whose infeasibility has been claimed by Amirteimoori and Kordrostami (Appl Math Comput 171(1): [136][137][138][139][140][141][142][143][144][145][146][147][148][149][150][151] 2005), always has a feasible solution and the efficiency invariance principle does not necessarily satisfy in Amirteimoori and Kordrostami's method (Appl Math Comput 171 (1): [136][137][138][139][140][141][142][143][144][145][146][147][148][149][150][151] 2005). Hence, we present two equitable methods for fixed cost allocation based on the efficiency invariance and common set of weights principles such that, if possible, they help meet these two principles. In the first method, the costs are allocated to DMU in such a way that the efficiency score of DMUs does not change, and simultaneously this allocation has the minimum distance from the allocation that has been obtained with a common set of weights. However, in the second method, the costs are allocated in such a way that input and output of all units have a common set of weights and it has the minimum distance from the allocation that satisfies the efficiency invariance principle. Moreover, both methods, consider the satisfaction of each unit of the allocated cost. Finally, the proposed method is illustrated by two real world examples.

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Section: Beasley's Methodsmentioning

confidence: 99%

Section: The Failure Of Amirteimoori and Kordrostami's (2005) Methods mentioning

confidence: 99%

“…Then, we will state Beasley's allocation method whose infeasibility was claimed by Amirteimoori and Kordrostami (2005).…”

Section: Preliminariesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Proposing a method for fixed cost allocation using DEA based on the efficiency invariance and common set of weights principles

2017

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“…Amirteimoori and Kordrostami [18] proposed a resource allocation and target setting model by combining the efficiency invariance principle of Cook and Kress [5] and the common weight of Beasley [8]. Amirteimoori and Tabar [19] proposed a DEA model which simultaneously allocates fixed resource and sets output targets.…”

Section: Introductionmentioning

confidence: 99%

Centralized Resource Allocation and Target Setting Based on Data Envelopment Analysis Model

Yang

Wang

Feng

2018

Mathematical Problems in Engineering

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This paper aims to develop a data envelopment analysis (DEA) based model for allocating input resources and deciding output targets in organizations with a centralized decision-making environment, for example, banks, police stations, and supermarket chains. The central decision-maker has an interest in maximizing the total output production and at the same time minimizing the total input consumption. Traditionally, all decision-making units (DMUs) can be easily projected to the efficient frontier, which is a mathematical feasibility; however, it does not guarantee the managerial feasibility during the planning period. In this paper, we will take potential limitations of input-output changes into account by building a difficulty coefficient matrix of modifying their production in the current production possibility set so that the solution guarantees managerial feasibilities. Three objectives, namely, maximizing aggregated outputs, minimizing the consumption of input resources, and minimizing the total difficulty coefficient, are proposed and incorporated into the formation of resource allocation and target setting scheme. Building on this, we combine DEA and multiobjective programming to solve the resource allocation and target setting problem. In the end, we apply our proposed approach to a real-world problem of sixteen chain hotels to illustrate the efficacy and usefulness of the proposed approach.

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