Measurement of returns to scale with weight restrictions: How to deal with the occurrence of multiple supporting hyperplanes? (1507.00705v1)

Abstract: While measuring returns to scale in data envelopment analysis (DEA), the occurrence of multiple supporting hyperplanes has been perceived as a crucial issue. To deal effectively with this in weigh restrictions (WR) framework, we first precisely identify the two potential sources of its origin in the non-radial DEA setting. If the firm under evaluation P is WR-efficient, the non-full-dimensionality of its corresponding P-face-a face of minimum dimension that contains P-is the unique source of origin (problem Type I). Otherwise, the occurrence of multiple WR-projections or, correspondingly, multiple P-faces becomes the other additional source of origin (problem Type II). To the best of our knowledge, while problem Type I has been correctly addressed in the literature, the simultaneous occurrences of problems Types I and II have not effectively been coped with. Motivated by this, we first show that problem Type II can be circumvented by using a P-face containing all the P-faces. Based on this finding, we then devise a two-stage linear programming based procedure by extending a recently developed methodology by [Mehdiloozad, M., Mirdehghan, S. M., Sahoo, B. K., & Roshdi, I. (2015). On the identification of the global reference set in data envelopment analysis. European Journal of Operational Research, 245, 779-788]. Our proposed method inherits all the advantages of the recently developed method and is computationally efficient. The practical applicability of our proposed method is demonstrated through a real-world data set of 80 Iranian secondary schools.