Data envelopment analysis from decision theoretical perspective

Analyzing the efficiency of actions or organizational units is a fundamental problem of economic research. Multiobjective decision making (MODM) – as a part of economic decision making theory – supports the management of organizations solving conflicts of objectives. In contrast to MODM, data envelopment analysis (DEA) offers various measurements of efficiency, or rather of inefficiency of organizational units. A comparison of both MODM and DEA shows that in order to measure inefficiency of organizational units DEA solves the underlying vector optimization problem using various distance functions. For an interpretation of these measures it is necessary to consider different metrics to be used and as well different supposed sets of alternatives.