Alternative SBM Model for Network DEA

Network DEA considers subprocesses and intermediate flows among them.Network DEA can identify more sources of inefficiency.Proposed approach provides more ambitious input and output targets and lower efficiency scores.Proposed approach adopts a system-wide perspective focusing on improving external inputs and outputs. In this paper a slacks-based measure (SBM) model for general networks of processes is presented. The proposed model differs from existing SBM Network Data Envelopment Analysis (DEA) approaches in that it considers the exogenous inputs and outputs at the system level instead of at the process level. It also relaxes the constraints for both the fixed-link and the free-link cases, thus enhancing the discriminating power of the model. To assess the performance of the individual processes an external efficiency model is presented. The proposed approach projects the system operation point onto the efficient frontier so that the target operation points of the different processes are externally efficient. The approach is illustrated with a problem from the literature.