A new model for evaluating cost efficiency using output slack variables in Data Envelopment Analysis

In previous methods to estimate cost efficiency using data envelopment analysis, a dominated decision-makingunit (DMU) in the production possibility set(PPS) can be introduced as a cost efficiency unit. That is, a DMU maybe cost-efficient, but not performance efficient. In this paper, at first, we provide a new definition for a cost-efficientunit, and then a model is presented in which the necessary condition for introducing a cost efficiency of DMU is itsparato efficiency.

Keywords:

Data Envelopment Analysis , Decision Making Unit , Production Possibility Set , Cost Efficiency , Slack variables