How to Incorporate Preference Information in a Weight-Restricted DEA Model: A Straightforward Solution Applied in the Field of Economics, Based on Simos’ Revised Method

Abstract

Data envelopment analysis (DEA) is one the most successful techniques in the field of Operations Research. DEA is a non-parametric and objective approach for evaluating the relative efficiency of a set of decision-making units. The original DEA proposal contemplated the total freedom of variation of weights. This free variation may lead to situations with non-realistic weights and to the impossibility of incorporating the judgments of decision-makers. This work studies the links between multicriteria decision analysis (MCDA) and DEA by introducing weight restrictions in a DEA model using a methodology developed to obtain criteria weights in a MCDA context: the so-called Revised Simos’ Procedure. The presented approach is suitable to be applied in the field of economics and management, being an intuitive and simple enough method for decision-makers who are not familiar with working with DEA models or multicriteria decision analysis. A classic example is presented, where the results found with this approach are compared with the results of other approaches which also use multicriteria decision analysis as a tool to obtain weight restrictions for a DEA model.

Keywords

• data envelopment analysis
• multicriteria decision analysis
• weight restrictions
• assurance regions
• Simos’ procedure