Efficiency bounds in Data Envelopment Analysis

This paper considers a proposal, by Chang and Guh, that the non-archimedean infinitesimal in the CCR data envelopment analysis model be replaced with a data-dependent finite magnitude. Whilst the intention of the proposal is clear: to reduce the CCR efficiency rating of certain problematic DMUs, it is found not to work in practice. An alternative implementation, which puts the CCR model into a mixed-binary linear programming framework, is developed. Chang and Guh's proposal is also related to the earlier modification to the CCR model, Constrained Facet Analysis. Both are seen as providing bounds on the relative efficiency of DMUs which are not properly enveloped in the CCR model.

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