A study of optimal weights restriction in Data Envelopment Analysis

Data Envelopment Analysis (DEA) is a mathematical programming approach to assessing relative efficiencies within a group of Decision Making Units (DMUs). An important outcome of such an analysis is a set of virtual multipliers or weights accorded to each (input or output) factor taken into account. Due to the factor weight flexibility of the DEA model, a DMU may assign very low-factor weight scores to some of its unfavourable inputs or outputs and appear as efficient, thus producing nonsensical results in some cases. This study focuses on this shortcoming to integrate an optimal weights restriction model and absolute restriction method to restricting weight flexibility in DEA, so that the evaluation result can be more realistic, and finally takes the garbage clearance of each district in Kaohsiung city in Taiwan as an example for the illustration.