Measurement of returns to scale using a non-radial DEA model: A range-adjusted measure approach

Toshiyuki Sueyoshi, Kazuyuki Sekitani

Research output: Contribution to journalArticle

60 Citations (Scopus)

Abstract

This research theoretically explores the measurement of returns to scale (RTS), using a non-radial DEA (data envelopment analysis) model. A range-adjusted measure (RAM) is used as a representative of such non-radial models. Historically, a type of RTS has been discussed within an analytical framework of radial models. The radial-based RTS measurement is replaced by the non-radial RAM/RTS measurement in this study. When discussing the non-radial RAM/RTS measurement, this study finds a problem of multiple projections that cannot be found in the radial measurement. In this research, a new linear programming approach is proposed to identify all efficient DMUs (decision making units) on a reference set. The important feature of the proposed approach is that it can deal with a simultaneous occurrence of (a) multiple reference sets, (b) multiple supporting hyperplanes and (c) multiple projections. All of the three difficulties are handled by the proposed RAM/RTS measurement. In particular, we discuss both when the three different types of multiple solutions occur on the RAM/RTS measurement and how to deal with such difficulties. Our research results make it possible to measure not only the type of RTS but also the magnitude of RTS in the RAM measurement.

Original languageEnglish
Pages (from-to)1918-1946
Number of pages29
JournalEuropean Journal of Operational Research
Volume176
Issue number3
DOIs
Publication statusPublished - 1 Feb 2007

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Keywords

  • Data envelopment analysis
  • Non-radial measure
  • Returns to scale

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