Data envelopment analysis with upper bound on output to measure efficiency performance of departments in Malaikulsaleh University

Abstract

The higher education system in Indonesia can be considered not only as an important source of developing knowledge in the country, but also could create positive living conditions for the country. Therefore it is not surprising that enrollments in higher education continue to expand. However, the implication of this situation, the Indonesian government is necessarily to support more funds. In the interest of accountability, it is essential to measure the efficiency for this higher institution. Data envelopment analysis (DEA) is a method to evaluate the technical efficiency of production units which have multiple input and output. The higher learning institution considered in this paper is Malikussaleh University located in Lhokseumawe, a city in Aceh province of Indonesia. This paper develops a method to evaluate efficiency for all departments in Malikussaleh University using DEA with bounded output. Accordingly, we present some important differences in efficiency of those departments. Finally we discuss the effort should be done by these departments in order to become efficient.