A cross-dependence based ranking system for efficient and inefficient units in DEA

Decision making units (DMUs) can be ranked using data envelopment analysis (DEA) technologies. This paper develops a new ranking system under the condition of variable returns to scale (VRS) based on a measure of cross-dependence efficiency (MCDE), where the evaluation for an efficient DMU is dependent of the efficiency changes of all inefficient units due to its absence in the reference set, while the appraisal of inefficient DMUs depends on the influence of the exclusion of each efficient unit from the reference set. The infeasibility problem that arises from the conventional super-efficiency models is eliminated. A new approach to ranking inefficient units is embedded in the proposed ranking system. Through an example, advantages of our proposal are demonstrated. A real application illustrates the effectiveness of the cross-dependence based ranking system.

Research highlights
► We develop a new ranking system based on a measure of cross-dependence efficiency.
► The infeasibility problem in conventional super-efficiency models is eliminated.
► The ranking system is demonstrated effective through a real application.