DEA based resource allocation considering environmental factors

Resource allocation, as an important issue in management science, has drawn a lot of attention from both relative researchers and corporate managers. In recent years, data envelopment analysis (DEA) has been popularly applied in this field. In this paper, we propose some new DEA models, which consider both economic and environmental factors in the allocation of a given resource. Three scenarios of the given resource in the next period will be considered: one is larger than that in the present period, another is smaller than that in this period and the third is equal to that in this period. Two objective functions are formulated for the three scenarios, i.e., maximizing the total desirable outputs and minimizing the total undesirable outputs. The approach retains the advantages of traditional DEA, unit-invariant property, objectively-determined weights of inputs and outputs, and perfect dealing with multi-inputs and multi-outputs. An example is also employed to illustrate the approach.