A new method in data envelopment analysis to find efficient decision making units and rank both technical efficient and inefficient DMUs together

Abstract

The inefficient DMUs are usually arranged after the technical efficient ones byDEA methods, however, it is possible that a technical efficient DMU neither beefficient nor be more efficient than some inefficient ones. This studydistinguishes between the terms ‘technical efficiency’ and ‘efficiency’ anddemonstrates that the technical efficiency is a necessary condition for beingefficient and it is not an enough condition to call a DMU as efficient DMU. Thestudy identifies the definitions of those terms and gives a new strong method tocharacterize efficient DMUs among the technical efficient ones. The new method,although, avoids the need for recourse to prices, weights or other assumptionsbetween inputs and outputs of DMUs, it is also able to consider the prices andweights. A numerical example is also characterized the worth and benefits of thenew proposed model in comparison with all current DEA models.