Designing and evaluating an optimal budget plan for parallel network systems through DEA methodology

For an optimal system design (OSD), data envelopment analysis (DEA) treats companies as black boxes disregarding their internal processes. Considering the effect of these processes into account companies can upgrade their internal mechanisms of optimal budgeting allocation. The internal processes can be defined as series and parallel networks or a combination of them. In the literature, DEA is utilized as an approach for OSD in order to determine the optimal budget for a company's activities in a system of series network production; but it is shown that this model is not suitable for budgeting parallel systems. To fill this gap, a new model is presented in this paper to evaluate a company's optimal budgeting which has a parallel network system. The presented parallel network OSD via DEA models, allocates the optimal budget to each of the internal processes of the decision-making units (DMU) based on the efficiency of the parallel internal processes. The model, with a limited budget, also is able to identify the amount of budget deficit and congestion. In this regard, two real cases are studied using the suggested model, which is presented in the parallel network OSD via DEA and Forest production in Taiwan. The optimal budget, budget deficit and congestion, and also the advantages of the proposed model are discussed in these examples as well.

Keywords:

Network data envelopment analysis , budgeting , parallel system , DEA