www.ijmst.com volume 2 issue 2 manuscript-1

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Education

Published on March 1, 2014

Author: ijmst

Source: slideshare.net

Description

Data Envelopment Analysis (DEA) is a methodology based upon linear programming employed for assessing the relative performance of a set of firms that use a variety of identical inputs to produce a variety of identical outputs. The principles of DEA date back to Farrel(1957), and the recent works by Charnes et al.(1978),Norman and Stoker(1991), Cooper et al.(2000, M. Khodabakhshi (2010). DEA is a linear program technique for measuring the performance efficiency of organizational units like banks, mutual fund, police stations, hospitals, tax offices, defence bases, insurance companies, schools, libraries and university departments which are termed Decision Making Units (DMUs). DEA can handle multiple inputs and multiple outputs as opposed to other techniques such as ratio analysis or regression. By identifying the “peers” for organizations that are not observed to be efficient, it provides a set of potential role models that an organization can look into, in the first instance, for ways of improving its operations. It is a useful tool for examining the efficiency of government service providers. DEA (in conjunction with other measures) be explored to increase our understanding of public sector performance and potential ways of improving it. The performance of a unit is evaluated by comparing its performance with the best performing units as an efficiency frontier and thus DEA is called frontier analysis.

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