Determination of Elasticity in the Existence of Non-discretionary Factors in Performance Analysis

Discretionary models of data envelopment analysis (DEA) assume that all inputs and outputs can be varied at the discretion of management or other users. In any realistic situation, however, there may exist “exogenously fixed" or non-discretionary factors that are beyond the control of a DMU's management, which also need to be considered. This paper discusses and reviews the concept of returns to scale (RTS) and elasticity in DEA when some inputs and outputs are exogenously fixed. An efficient algorithm which is capable of determining elasticity in the existence of non-discretionary factors is provided, too.

Keywords:

Linear Programming , DEA , Returns to Scale , Elasticity , Nondiscretionary Factors