On alternative optimal solutions in the estimation of returns to scale in data envelopment analysis

On alternative optimal solutions in the estimation of returns to scale in data envelopment analysis

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Article ID: iaor19993215
Country: Netherlands
Volume: 108
Issue: 1
Start Page Number: 149
End Page Number: 152
Publication Date: Jul 1998
Journal: European Journal of Operational Research
Authors: ,
Keywords: returns to scale
Abstract:

Zhu and Shen show that alternative optimal solutions in the estimation of returns to scale (RTS) are caused by a particular linear dependency among a set of extreme efficient decision making units (DMUs) when one employs the concept of most productive scale size in data envelopment analysis (DEA). This paper demonstrates that the presence of weakly efficient DMUs may also lead to alternative optima and extends the results of Zhu and Shen to the entire frontier. Necessary and sufficient conditions for the presence of multiple optimal solutions for constant returns to scale (CRS) DMUs are established.

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