1. Operations and Information Management Group, Aston Business School, Aston University, Birmingham, UK;2. Department of Computer Engineering, Postgraduate Engineering Centre, Islamic Azad University of South Tehran Branch, Tehran, Iran
Abstract:
Data envelopment analysis (DEA) is defined based on observed units and by finding the distance of each unit to the border of estimated production possibility set (PPS). The convexity is one of the underlying assumptions of the PPS. This paper shows some difficulties of using standard DEA models in the presence of input-ratios and/or output-ratios. The paper defines a new convexity assumption when data includes a ratio variable. Then it proposes a series of modified DEA models which are capable to rectify this problem.