Resource allocation problem based on the data envelopment analysis model

In this paper, we propose a method for the resource allocation problems based on data envelopment analysis (DEA). When we consider this problem for the organization such as the large corporation, we should recognize that there are two management levels in the organization, the operator of each section (for example, the branch office or decision/making unit (DMU)), and the manager of the organization. Each operator is concerned with the performance and the efficiency of his own section. On the other hand, the manager is concerned with those in all of the organization. Generally, the management resource allocation problem with the plural sections can be treated as a selection problem from the mixed proposals in profitability analysis. The management resource means, for example, manpower or material. The selection problem from the mixed proposals is to choose a plan independently from among several mutually exclusive proposals for each section so as to maximize the return of the organization. However, there are some problems in this method such as how to estimate the return of each proposal and how to consider the present activity level of the section if the manager wants to re-allocate his holding resources. To solve these problems, we use the concept of production possibility set of the Banker, Charnes and Cooper DEA model. First, we measure the efficiency of the present activity of each section (DMU). Next, we reallocate our holding management resources to obtain the maximum outputs, by considering the present activity of the DMU, where we assume that the efficient frontier of DEA is the mutually exclusive proposals of each DMU. Moreover, we propose another model by which we can save the amount of input resources for the DMUs.