Cross efficiency evaluation method based on weight-balanced data envelopment analysis model

In this paper, the cross efficiency evaluation method, regarded as a DEA extension tool, is firstly reviewed for its utilization in identifying the Decision Making Unit (DMU) with the best practice and ranking the DMUs by their respective cross-efficiency scores. However, we then point out that the main drawback of the method lies in non-uniqueness of cross-efficiency scores resulted from the presence of alternate optima in traditional DEA models, obviously making it become less effective. Aiming at the research gap, a weight-balanced DEA model is proposed to lessen large differences in weighted data (weighted inputs and weighted outputs) and to effectively reduce the number of zero weights for inputs and outputs. Finally, we use two examples of the literature to illustrate the performance of this approach and discuss some issues of interest regarding the choosing of weights in cross-efficiency evaluations.

► The main drawback of the cross-efficiency evaluation method is considered.
► A weight-balanced DEA model is proposed to determine the ultimate cross efficiency.
► Two examples are illustrated to examine the validity of the proposed method.