Data envelopment analysis models for resource reallocation and production input/output estimation

This paper discusses the ‘inverse’ data envelopment analysis (DEA) problem with preference cone constraints. An inverse DEA model can be used for a decision making unit to estimate its input/output levels when some or any of its input/output entities are revised, given its current DEA efficiency level. The extension of introducing additional preference cones to the previously developed inverse DEA model allows the decision makers to incorporate their preferences or important policies over inputs/outputs into the production analysis and resource allocation process. We provide the properties of the inverse DEA problem through a discussion of its related multi-objective and weighted sum single-objective programming problems. Numerical examples are presented to illustrate the application procedure of our extended inverse DEA model. In particular, we demonstrate how to apply the model to the case of a local home electrical appliance group company for its resource reallocation decisions.