Modifying the Efficiency Measure in DEA DEA does not distinguish among efficient DMUs because they are assigned efficiencies of 1.0 by the standard procedure. One suggestion for modifying the procedure is the following. For each efficient DMU, repeat the analysis (i.e., solve the linear programming problem) without retaining the DMU being evaluated in the set of constraints. In this form of the model, an efficient DMU may turn out to have efficiency greater than 1.0.
Analyze Exercise using this approach, calculating the revised efficiency rating for each of the DMUs.
(a) List the hospitals in order of their revised efficiencies.
(b) For each hospital, compute how much change occurs between the efficiency rating in the standard procedure and the revised efficiency rating.
Exercise :
Evaluating Hospital Efficiency DEA has been used to measure the relative efficiency of a group of hospitals. This study involved seven teaching hospitals; data on three input measures and four output measures are provided in Table.
(a) Perform a DEA evaluation for this set of units, listing the efficiency for each hospital.
(b) Consider the performance of Hospital D. What is the interpretation of the efficiency measure for Hospital D?
(c) Which hospitals would you recommend Hospital D consider emulating to improve its efficiency?
(d) What are the inputs and outputs of the HCU for Hospital D?