A New Method in Efficiency Measurement

Data Envelopment Analysis (DEA) is a powerful technique for relatively efficiency measurement and it is intensively used in different kind of disciplines but this technique has some drawbacks. In the classical DEA technique, total number of inputs and outputs is determined by the number of evaluated firms. Therefore, this powerful efficiency measurement technique cannot be employed for limited number firm problems. DEA uses realized data so it can be used for objective evaluations. However, in some cases, subjective evaluation is also very important so it should be included in DEA analyses. To get rid of these drawbacks, a new technique is developed with integration of DEA and Analytical Hierarchy Process (AHP) and it is named as AHP.DEA Method. The developed method creates an opportunity using more inputs and outputs in the relatively efficiency measurement for limited number firm cases. Therefore, reliability of the estimation is increased with increasing the number of inputs and outputs in the estimations. The AHP.DEA technique also integrates both subjective opinion of experts and objective evaluation.