Issue: 2021/Vol.31/No.2, Pages 5-21

DEA-BASED COMPETITION STRATEGY IN THE PRESENCE OF UNDESIRABLE PRODUCTS: AN APPLICATION TO PAPER MILLS

Alireza Amirteimoori, Simin Masrouri

Full paper (PDF)    

Cite as: A. Amirteimoori, S. Masrouri. DEA-based competition strategy in the presence of undesirable products: An application to paper mills. Operations Research and Decisions 2021: 31(2), 5-21. DOI 10.37190/ord210201

Abstract
In real applications of data envelopment analysis (DEA), there are cases in which undesirable outputs are produced along with desirable outputs in such a way that the total sum of the produced undesirable outputs over the production units must be fixed and constant. In this case, a trade-off between the decision-making units (DMUs) is needed to balance the production of undesirable outputs. In a rational sight, this trade-off is done in such a way that all DMUs improve their relative performances. In this paper, a single DEA-based model is proposed to model fixed and variable-sum undesirable outputs in production processes. A common equilibrium efficient frontier is constructed and after reallocating the input/output factors, all decision-making units (DMUs) prevail as efficient. A real case of 32 paper mills in China is given. The results of the analysis demonstrated that some economically developed paper mills have better performance than less developed paper mills; in particular, all efficient paper mills are the developed ones.

Keywords: data envelopment analysis, equilibrium efficient frontier, undesirable outputs, efficiency

Received: 22 September 2020    Accepted: 7 May 2021