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Data envelopment analysis of randomized ranks

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Author(s): Sant'Anna Annibal P.

Journal: Pesquisa Operacional
ISSN 0101-7438

Volume: 22;
Issue: 2;
Start page: 203;
Date: 2002;
Original page

Keywords: decision aid | randomized ranks | data envelopment analysis

ABSTRACT
Probabilities and odds, derived from vectors of ranks, are here compared as measures of efficiency of decision-making units (DMUs). These measures are computed with the goal of providing preliminary information before starting a Data Envelopment Analysis (DEA) or the application of any other evaluation or composition of preferences methodology. Preferences, quality and productivity evaluations are usually measured with errors or subject to influence of other random disturbances. Reducing evaluations to ranks and treating the ranks as estimates of location parameters of random variables, we are able to compute the probability of each DMU being classified as the best according to the consumption of each input and the production of each output. Employing the probabilities of being the best as efficiency measures, we stretch distances between the most efficient units. We combine these partial probabilities in a global efficiency score determined in terms of proximity to the efficiency frontier.
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