Cross-efficiency evaluation and improvement in two-stage network data envelopment analysis

Abstract

In Network Data Envelopment Analysis models, by considering the internal structure of production units rather than a simple black-box, more inefficiency sources are identified. The objective of this paper is to assess and improve the performance of Decision Making Units with a two-stage network using cross-efficiency approach. The main contributions of this study include; first, a new benevolent method in cross-efficiency evaluation of two-stage network is proposed. Second, we propose a method for setting inputs and outputs target to improve the cross-evaluations by changing inputs of the first stage and outputs of the second stage, simultaneously. A case study validates the discussions.