A MATHEMATICAL-PROGRAMMING APPROACH FOR MEASURING TECHNICAL EFFICIENCY IN A FUZZY ENVIRONMENT

A three stage approach is proposed to measure technical efficiency in a fuzzy environment. This approach uses the traditional data envelopme nt analysis framework and then merges concepts developed in fuzzy para metric programming (Carlsson and Korhonen, 1986), In the first stage, vague input and output variables are expressed in terms of their risk- free and impossible bounds and a membership function. This membership function represents the degree to which a production scenario is plaus ible, In the second stage, conventional efficiency measurement models (Banker, Charnes and Cooper, 1984; Deprins, Simar and Tulkens, 1984) a re re-formulated in terms of the risk-free and impossible bounds and t he membership function for each of the fuzzy input and output variable s, In the third stage, technical efficiency scores are computed for di fferent values of the membership function so as to identify uniquely s ensitive decision making units, The approach is illustrated in the con text of a preprint and packaging manufacturing line which inserts comm ercial pamphlets into newspapers.