Unified performance evaluation approach in competitive environment: Case study on power plants

Data envelopment analysis (DEA) evaluates the performance of decision making units (DMUs). This research proposes a new approach to evaluate thermal power plants. In this study, we define two categories of inputs (operational and non-operational) to measure performance of power plants. In real case study, it is necessary to explore how to combine two separated efficiency measures in a unified structure. The conventional data envelopment analysis (DEA) may fail to discriminate among decision making units (DMUs) and the resulting efficiency scores may not be meaningful, especially when the number of DMUs is insufficient. In this paper, a new approach is suggested based on DEA and game theory to evaluate DMUs by a large scale of measures. For this purpose, Nash bargaining game as a cooperative game model and the conventional DEA models are combined. The proposed approach regardless of the number of DMUs discriminates among the DMUs more effectively. Moreover, DMUs can be compared by different categories of measures in the competitive environment. Furthermore, the case study of thermal power plants in Iran is presented to show the abilities of the proposed approach.

Keywords:

Data envelopment analysis , Game theory , Power plant , Efficiency