DEA studies on comprehensive efficiency of output allocation with an application to paper mills along the Huai River

The study on output allocative efficiency considering the emission trading is meaningful to allocate emission quota in order to promote production efficiency of industry. This chapter studies the output allocation problem with constraints to profit and pollution goals, and proposes three types of output allocative efficiency measures, including the comprehensive output allocative efficiency, the profit-oriented output allocative efficiency based on pollution constraint, and the pollution-oriented output allocative efficiency based on profit constraint, which aim to maximize the total profit and (or) minimize the total pollution. The proposed measures are used to evaluate the output allocative efficiencies of 32 paper mills along the Huai River in China, and different parameters are tested with sensitivity analysis to examine the changes of optimal output combination. This chapter helps the enterprise to optimize the decision of production and helps the government to formulate a reasonable plan of pollution control and treatment.