MODELS FOR IMPROVED EFFECTIVENESS BASED ON DEA EFFICIENCY RESULTS

Following the characterization via Data Envelopment Analysis (DEA) of managerial units as efficient or inefficient, management will wish to increase profitability and/or control costs while becoming (or remaini ng) technically efficient in the DEA sense. This paper presents three families of models for achieving this and describes the managerial sit uations in which they are useful. The first addresses the management o f an existing Decision Making Unit (DMU) and the second attempts to id entify the desired ''location'' for a new DMU. The third addresses the aggregate of all DMUs, reallocating scarce resources among them for m aximum overall organizational profitability and technical efficiency.