Issue: 2017/Vol.27/No.3, Pages 5-20
EFFICIENCY MEASUREMENT USING NONPARAMETRIC PRODUCTION ANALYSIS IN THE PRESENCE OF UNDESIRABLE OUTPUTS: AN APPLICATION TO POWER PLANTS
Alireza Amirteimoori
, Mina Fooladvand, Sohrab Kordrostami
Cite as: A. Amirteimoori, M. Fooladvand, S. Kordrostami. Efficiency measurement using nonparametric production analysis in the presence of undesirable outputs: An application to power plants. Operations Research and Decisions 2017: 27(3), 5-20. DOI 10.5277/ord170301
Abstract
In order to deal with undesirable products in models of performance analysis, we need to replace the assumption of free disposability by weak disposability and this assumption has been used to model undesirable products as outputs. The traditional axiom of weak disposability of Shephard (1970) is given in a multiplier form and, in this sense, the level of bad outputs is equal to zero if and only if the level of the desirable outputs is equal to zero. An alternative definition of the weak disposability of outputs in additive form has been proposed. An axiomatic foundation has been introduced to construct a new production technology space in the presence of undesirable outputs. The model is illustrated using real data from 92 coal fired power plants.
Keywords: data envelopment analysis, performance analysis, undesirable outputs, weak disposability, efficiency, input/output.
Received: 19 April 2017 Accepted: 26 September 2017