Allocating fixed costs and resources via data envelopment analysis, European Journal of Operational Research, vol. 147, 2003, pp198-216

In this paper we show that data envelopment analysis (DEA) can be viewed as maximising the average efficiency of the decision- making units (DMUs) in an organisation. Building upon this we present DEA based models for: (a) allocating fixed costs to DMUs and (b) allocating input resources to DMUs. Simultaneous to allocating input resources output targets are also decided for each DMU. Numeric results are presented for a number of example problems taken from the literature.

Keywords: data envelopment analysis, efficiency, cross-efficiencies, fixed cost allocation, resource allocation, target setting

J E Beasley