An Equitable DEA-Based Approach of Allocating Fixed Costs or Resources

摘要

The problem of how to allocate a fixed cost or resource among a set of competing entities in an equitable way is a considerably important issue. Based on data envelopment analysis (DEA), the current paper proposes a new method for allocating fixed costs and resources to all decision making units (DMUs) respectively, in such a way that the relative efficiencies of DMUs remain unchanged and the distribution should reflect the individual DMUs' performances and scales of inputs consumption and outputs production. To illustrate the method, numerical results for an example are presented in this paper.