Measuring the efficiency of interdependent decision making sub-units in DEA

This paper discusses the problem of evaluating the efficiency of a set of interdependent Decision Making Sub-units (DMSUs) that make up a large Decision Making Unit (DMU). The DMSUs are interdependent in the sense that some outputs produced by each DMSU is used as input by other one. The current paper presents a modified version of the DEA model to estimate the relative efficiency of DMSUs. The proposed method preserves the linearity of CCR model of [A. Charnes, W.W. Cooper, E. Rhodes, Measuring the efficiency of decision making units, European Journal of Operational Research 2(6) (1978) 429-444].