ABC classification using DEA

The motivation of this paper is to classify a set of decision making units (DMUs) into three classes A, B, and C using an optimistic-pessimistic approach of data envelopment analysis technique. To this end the minimum and maximum possible efficiency scores of DMUs are estimated under the assumption that the sum of their scores equals to unity. Then, all DMUs are ranked two times. First, they are raked according to their minimum scores, and then according to their maximum scores. Finally, the class of each DMU is ascertained according to its ranks in two rankings.

Keywords:

Data envelopment analysis , ABC classification , Optimistic-pessimistic approach