Trade-off

Production technologies in data envelopment analysis (DEA) are described in terms of inputs and outputs. Production trade-offs represent simultaneous changes to the inputs and outputs that are possible in the technology under consideration. It was shown that the use of production trade-offs not only improves the discrimination of DEA models but also preserves the traditional meaning of efficiency as a radial improvement factor for inputs and outputs.

the input radial efficiency of DMUo is reciprocal to the optimal y in the following program:

trade1[1].JPG

Podinovski, V.V., 2004, "Production trade-offs and weight restrictions in data envelopment analysis," Journal of the Operational Research Society, 55, 1311–1322. untitled2.JPG


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