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Calculating cost efficiency using prices dependent on time via approximate method
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Jafar Pourmahmoud *    , Naser Kaheh |
| Shahid Madani University , pourmahmoud@azaruniv.ac.ir |
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Abstract: (1263 Views) |
In the traditional cost-efficiency model, the information about each decision unit includes inputs, outputs, and the input prices are fixed and specific. In practice, the price of the inputs often fluctuates at different times, and these prices for the decision-making unit are time-dependent. By the traditional method, the efficiency of decision units is impossible in the presence of time-dependent input prices. On the other hand, the exact method of cost-efficiency calculation is also difficult and time-consuming. In this study, a new method for calculating cost efficiency of decision making units with time-dependent prices during a period of time using numerical integral is presented. As the information of the decision-making units varies over time, a method for calculating their cost efficiency accurately is presented. however, the exact method is difficult or impossible to be solved in some cases. Therefore, in this study, an approximate method for calculating the cost efficiency in the given state is presented. This is a suitable replacement for the precise method. The efficiency of decision making units at different time is measured and the units are ranked using the proposed method. Finally, a numerical example is provided to indicate the method and compare it with the precise method. This study shows that the efficiency obtained by the approximate method is very close to the efficiency obtained by the exact method, and at the same time, the calculation speed increases.
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| Keywords: Data envelopment analysis, Time-dependent prices, Time-dependent cost efficiency, Ranking |
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Full-Text [PDF 628 kb]
(5770 Downloads)
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Type of Study: Original |
Subject:
Mathematical Modeling and Applications of OR
Received: 2023/02/6 | Accepted: 2022/05/30 | Published: 2022/05/30
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