Continuous Optimization

Data envelopment analysis with imprecise data

Dimitris K. Despotis
a,
*
, Yiannis G. Smirlis
b
a
Department of Informatics, University of Piraeus, 80 Karaoli & Dimitriou Str., 18534 Piraeus, Greece
b
Department of Statistics and Actuarial Science, University of Piraeus, 80 Karaoli & Dimitriou Str., 18534 Piraeus, Greece
Received 19 September 2000; accepted 4 June 2001
Abstract
In original data envelopment analysis (DEA) models, inputs and outputs are measured by exact values on a ratio
scale. Cooper et al. [Management Science, 45 (1999) 597607] recently addressed the problem of imprecise data in DEA,
in its general form. We develop in this paper an alternative approach for dealing with imprecise data in DEA. Our
approach is to transform a non-linear DEA model to a linear programming equivalent, on the basis of the original data
set, by applying transformations only on the variables. Upper and lower bounds for the eciency scores of the units are
then dened as natural outcomes of our formulations. It is our specic formulation that enables us to proceed further in
discriminating among the ecient units by means of a post-DEA model and the endurance indices. We then proceed still
further in formulating another post-DEA model for determining input thresholds that turn an inecient unit to an
ecient one. 2002 Elsevier Science B.V. All rights reserved.
Keywords: Data envelopment analysis; Interval data; Ordinal data; Imprecise data
1. Introduction
Data envelopment analysis (DEA) is a non-parametric method for evaluating the relative eciency of
decision-making units (DMUs) on the basis of multiple inputs and outputs. The original DEA models [2]
assume that inputs and outputs are measured by exact values on a ratio scale. Recently, Cooper et al. [6]
addressed the problem of imprecise data in DEA, in its general form. The term imprecise data reects the
situation where some of the input and output data are only known to lie within bounded intervals (interval
numbers) while other data are known only up to an order. Imprecise DEA (IDEA), proposed in that work,
is the rst unied approach for dealing directly with imprecise data in DEA (bounds and/or rankings
imposed directly on input/output data). In the same work, IDEA was extended to AR-IDEA to include the
assurance region approach (xed or ratio bounds and/or ordinal relations imposed on the weights)
European Journal of Operational Research 140 (2002) 2436
www.elsevier.com/locate/dsw
*
Corresponding author. Tel.: +30-1-4142315; fax: +30-1-4142357.
E-mail address: despotis@unipi.gr (D.K. Despotis).
0377-2217/02/$ - see front matter 2002 Elsevier Science B.V. All rights reserved.
PII: S0377- 2217( 01) 00200- 4
[1,911,14]. As long as interval and ordinal numbers are concerned in DEA, the CCR DEA model becomes
non-linear as apart from the weights, the levels of inputs and outputs are also variables to be estimated. The
approach in IDEA is to transform the non-linear model to a linear programming equivalent, by imposing
scale transformations on the data and variable alterations (products of variables are replaced by new
variables).
Prior to IDEA, pertinent work was that of Cook et al. [4,5], which, however, is conned only to
mixtures of exact and ordinal data. They started by dealing with only one ordinal input [4] and then
extended their model [5] to handle multiple cardinal and ordinal criteria. The basic idea in these models is
to assign new auxiliary variables, one for every combination of ordinal variables and distinct ranks of it.
The value for such an auxiliary variable corresponding to a DMU j and a rank position k is 1, if DMU j
is rated in the kth place of the ordinal variable and 0 otherwise. The associated weights are then re-
stricted accordingly to represent the weak or strict ordinal relations between the rank positions. In the
case of strict ordinal relations, a positive scalar e is used as a discrimination parameter between con-
secutive rank positions (sometimes dierent parameters are used for dierent criteria due to dierent
measurement scales). As the results are sensitive in perturbations of e, various technical arrangements are
elaborated to evaluate a common parameter value for all criteria. Extensions of these basic ideas are
reported in [3,12].
In this paper we develop an alternative approach for dealing with imprecise data (mixtures of exact,
interval and ordinal data in the same setting). We transform the non-linear DEA model to a linear pro-
gramming equivalent by using a straightforward formulation, completely dierent than that in IDEA.
Contrarily to IDEA, our transformations on the variables are made on the basis of the original data set,
without applying any scale transformations on the data. The original CCR DEA model with exact data, in
its multiplier form, derives then straightforwardly as a special case of our model. The potential of our
transformations enables us to uncover and thoroughly examine some new aspects of eciency in an im-
precise data setting, such as the variation of the eciency scores of the units. On the basis of our particular
transformations, new models are naturally introduced to estimate upper and lower bounds of the eciency
scores of the units, as well as to classify and further discriminate the units in terms of the variability of their
eciency scores. Moreover, we address and solve the problem of determining input thresholds that turn an
inecient unit to an ecient one, in an imprecise data setting. In Section 2, we formulate a DEA model for
dealing with interval data. Then, on the basis of this model, we dene upper and lower bound eciencies
for the units. Then we develop a post-DEA benevolent formulation [8,13] by which we examine the degree
to which a unit can maintain its eciency score in a favourable, for the other units, data setting. For this
purpose we introduce endurance indices that we use to discriminate further among the ecient units. In
Section 3, we extend our interval DEA model to incorporate ordinal data, thus dealing with the more
general case of imprecise data. We take, for this purpose, the line of Cook et al. [5]. In Section 4, we proceed
still further in formulating another post-DEA model, by which we determine the changes that should be
made in interval inputs in order to turn an inecient unit to an ecient one. Conclusions are given in
Section 5.
2. A DEA model with interval data
Assume n units, each using m inputs to produce s outputs. We denote by y
rj
the level of the rth output
r 1; . . . ; s from unit j j 1; . . . ; n and by x
ij
the level of the ith input i 1; . . . ; m to the jth unit.
Unlike the original DEA model, we assume further that the levels of inputs and outputs are not known
exactly; the true inputoutput data are known to lie within bounded intervals, i.e. x
ij
2 x
L
ij
; x
U
ij
and
y
rj
2 y
L
rj
; y
U
rj
, with the upper and lower bounds of the intervals given as constants and assumed strictly
positive. In such a setting, the following CCR DEA model:
D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436 25
max h
j
0

X
s
r1
u
r
y
rj
0
s:t:
X
m
i1
v
i
x
ij
0
1;
X
s
r1
u
r
y
rj

X
m
i1
v
i
x
ij
60; j 1; . . . ; n;
u
r
; v
i
Pe 8r; i;
1
is non-linear (non-convex) as, apart from the original variables u
1
; . . . ; u
r
; . . . ; u
s
and v
1
; . . . ; v
i
; . . . ; v
m
(weights for outputs and inputs, respectively), the levels of inputs x
ij
and outputs y
rj
are also variables whose
exact values are to be estimated.
2.1. Model formulation
Our approach is to transform the above model (1) into an equivalent linear program. First we apply the
following transformations to the variables x
ij
and y
rj
:
x
ij
x
L
ij
s
ij
x
U
ij
x
L
ij
; i 1; . . . ; m; j 1; . . . ; n with 0 6s
ij
61;
y
rj
y
L
rj
t
rj
y
U
rj
y
L
rj
; r 1; . . . ; s; j 1; . . . ; n with 0 6t
rj
61:
With these transformations, the variables x
ij
and y
rj
in model (1) are replaced by the new variables s
ij
and t
rj
,
which locate the levels of inputs and outputs within the bounded intervals x
L
ij
; x
U
ij
and y
L
rj
; y
U
rj
, respectively.
Model (1) still remains non-linear due to the products of variables v
i
s
ij
for inputs and u
r
t
rj
for outputs. We
then replace these products with new variables q
ij
v
i
s
ij
and p
rj
u
r
t
rj
. According to these transformations,
the weighted sum of inputs (composite input) for unit j in model (1) takes the form
X
m
i1
v
i
x
ij

X
m
i1
v
i
x
L
ij
s
ij
x
U
ij
x
L
ij

X
m
i1
v
i
x
L
ij
v
i
s
ij
x
U
ij
x
L
ij

X
m
i1
v
i
x
L
ij
q
ij
x
U
ij
x
L
ij
;
where the new variables q
ij
meet the conditions 0 6q
ij
6v
i
, as it is s
ij
q
ij
=v
i
with v
i
Pe and 0 6s
ij
61 for
every i and j. Similarly, the weighted sum of outputs (composite output) for unit j takes the form
X
s
r1
u
r
y
rj

X
s
r1
u
r
y
L
rj
t
rj
y
U
rj
y
L
rj

X
s
r1
u
r
y
L
rj
u
r
t
rj
y
U
rj
y
L
rj

X
s
r1
u
r
y
L
rj
p
rj
y
U
rj
y
L
rj

with 0 6p
rj
6u
r
for every r and j as explained above.
With the above substitutions, model (1) is nally transformed into the following linear program:
max h
j
0

X
s
r1
u
r
y
L
rj
0
p
rj
0
y
U
rj
0
y
L
rj
0

s:t:
X
m
i1
v
i
x
L
ij
0
q
ij
0
x
U
ij
0
x
L
ij
0
1;
X
s
r1
u
r
y
L
rj
p
rj
y
U
rj
y
L
rj

X
m
i1
v
i
x
L
ij
q
ij
x
U
ij
x
L
ij
60; j 1; . . . ; n;
p
rj
u
r
60; r 1; . . . ; s; j 1; . . . ; n;
q
ij
v
i
60; i 1; . . . ; m; j 1; . . . ; n;
u
r
; v
i
Pe 8r; i;
p
rj
P0; q
ij
P0 8r; i; j:
2
26 D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436
The CCR DEA model with exact inputoutput data derives as a special case of model (2). Indeed, if the
lower and upper bounds coincide for all inputs and outputs, the bounded intervals are all of zero length.
Therefore, the second terms in the summations vanish together with the variables p
rj
and q
ij
, the constraints
of the form p
rj
u
r
60 and q
ij
v
i
60 are eliminated and model (2) is reduced to model (1). If the upper
and lower bounds coincide for only some particular entries of Table 1, it is obvious that model (2) can
handle exact and interval data in the same setting.
In model (2), the evaluated unit j
0
adjusts not only the weights but also the levels of inputs and outputs
within their ranges that are in favour of it. The latter is accomplished through the variables q
ij
and p
rj
.
Particularly, q
ij
0 p
rj
0 if and only if the level of input i (output r) for unit j is set equal to x
L
ij
y
L
rj
.
Accordingly, q
ij
v
i
p
rj
u
r
if and only if the level of input i (output r) for unit j is set equal to x
U
ij
y
U
rj
.
These statements are easily proved by means of the transformations introduced above.
2.2. Upper and lower bounds of eciency scores
When the unit j
0
is evaluated by model (2), the levels of inputs and outputs of all the units, together with
the associated weights, are adjusted in favour of unit j
0
. In this manner, the eciency score attained by unit
j
0
in model (2) (say h

j
0
) is not worse (less) than any other eciency score that the unit might attain, by
adjusting the inputs and the outputs in a dierent way within the limits of the bounded intervals. However,
the transformations introduced in Section 2.1 enable us to dene explicitly upper and lower bounds of the
possible eciency scores that the unit j
0
might attain in an interval data setting. Indeed, the following
model provides such an upper bound for unit j
0
:
max H
j
0

X
s
r1
u
r
y
U
rj
0
s:t:
X
m
i1
v
i
x
L
ij
0
1;
X
s
r1
u
r
y
U
rj
0

X
m
i1
v
i
x
L
ij
0
60;
X
s
r1
u
r
y
L
rj

X
m
i1
v
i
x
U
ij
60; j 1; . . . ; n; j 6 j
0
;
u
r
; v
i
Pe 8r; i:
3
Model (3) is a DEA model with exact data, where the levels of inputs and outputs are adjusted in favour of
the evaluated unit j
0
and aggressively against the other units. For the evaluated unit, the inputs are adjusted
at the lower bounds and the outputs at the upper bounds of the intervals. Unfavourably for the other units,
the inputs are contrarily adjusted at their upper bounds and the outputs at their lower bounds. If we denote
by h
U
j
0
the eciency score attained by unit j
0
in model (3), we show in Appendix A that it is h

j
0
h
U
j
0
. It
derives that the DEA model with interval data can be solved by a sequence of linear programs with exact
Table 1
Interval data, eciency scores and endurance indices
DMU Inputs Outputs Eciencies and classication Endurance indices
j x
1j
x
2j
y
1j
y
2j
h
L
j
h

j
q r
1 12 15 0.21 0.48 138 144 21 22 0.224 1 E

0.73 0.25
2 10 17 0.1 0.7 143 159 28 35 0.227 1 E

1 0.86
3 4 12 0.16 0.35 157 198 21 29 0.823 1 E

1 1
4 19 22 0.12 0.19 158 181 21 25 0.445 0.907 E

0.44 0.19
5 14 15 0.06 0.09 157 161 28 40 1 1 E

1 1
D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436 27
data of the form (3), for a unit at a time. The benet, however, of using model (2) instead of model (3) is
obvious; the former facilitates repetitive uses for successive evaluations of the units, exactly as it is done
with the classical DEA. Implementation of model (3), on the other hand, invites for extra programming
eort as, when a new unit takes the place of the evaluated unit j
0
, the coecients of the linear program
change drastically and one must start afresh for each evaluation. In the next section we will unfold some
other useful issues based on model (2).
The model below provides a lower bound of the eciency scores for unit j
0
:
max F
j
0

X
s
r1
u
r
y
L
rj
0
s:t:
X
m
i1
v
i
x
U
ij
0
1;
X
s
r1
u
r
y
L
rj
0

X
m
i1
v
i
x
U
ij
0
60;
X
s
r1
u
r
y
U
rj

X
m
i1
v
i
x
L
ij
60; j 1; . . . ; n; j 6 j
0
;
u
r
; v
i
Pe 8r; i:
4
Model (4) is also a DEA model with exact data. Contrarily to model (3), however, the levels of inputs and
outputs are now adjusted unfavourably for the evaluated unit j
0
and in favour of the other units. For unit
j
0
, the inputs are adjusted at their upper bounds and the outputs at their lower bounds. For the other units,
the inputs are favourably adjusted at their lower bounds and the outputs at their upper bounds. In this
manner, unit j
0
comes in the worst possible position vis-aa-vis the other units. Therefore, the eciency (say
h
L
j
0
) attained by unit j
0
in model (4) serves as a lower bound of its possible eciency scores. So, the models
(2) and (4) provide for each unit a bounded interval h
L
j
; h

j
, in which its possible eciency scores lie, from
the worst to the best case. It is clear, however, that model (4) suers all the implementation peculiarities
discussed above for model (3).
2.3. Classication and discrimination of the units
In an interval data setting, many units are likely to be proved ecient, as apart from the exibility they
have in choosing the weights, they are also free to adjust the levels of inputs and outputs in a favourable
manner within the intervals. Thus further discrimination of the ecient units becomes more essential in an
interval data setting. On the basis of the above eciency score intervals, the units can be rst classied in
three subsets as follows:
E

fj 2 J=h
L
j
1g;
E

fj 2 J=h
L
j
< 1 and h

j
1g;
E

fj 2 J=h

j
< 1g;
where J stands for the index set f1; . . . ; ng of the units. The set E

consists of the units that are ecient in

any case (any combination of input/output levels). The set E

consists of units that are ecient in a

maximal sense, but there are input/output adjustments under which they cannot maintain their eciency.
Finally, the set E

consists of the denitely inecient units. Moreover, the range of possible eciency
scores can be used to rank further the units in the set E

.
After all, it is now possible to investigate the endurance of the eciency scores, mainly for the ecient
units in E

. Consider for this purpose the post-DEA model below:

28 D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436
max f
X
s
r1
X
n
j1
p
rj

X
m
i1
X
n
j1
q
ij
s:t:
X
s
r1
u
r
y
L
rj
0
p
rj
0
y
U
rj
0
y
L
rj
0
h

j
0
;
X
m
i1
v
i
x
L
ij
0
q
ij
0
x
U
ij
0
x
L
ij
0
1;
X
s
r1
u
r
y
L
rj
p
rj
y
U
rj
y
L
rj

X
m
i1
v
i
x
L
ij
q
ij
x
U
ij
x
L
ij
60; j 1; . . . ; n;
p
rj
u
r
60; r 1; . . . ; s; j 1; . . . ; n;
q
ij
v
i
60; i 1; . . . ; m; j 1; . . . ; n;
u
r
; v
i
Pe 8r; i;
p
rj
P0; q
ij
P0 8r; i; j:
5
Model (5) is a second-stage benevolent formulation that adjusts, in terms of averages, the levels of inputs
and outputs in favour of the competitive units while preserving the maximal eciency score of the eval-
uated unit j
0
. When applied to units in E

and in comparison to the best-case data setting, for j

0
, of model
(3), model (5) gures out the extent to which unit j
0
can maintain its 100% eciency score in a favourable
for the other units data setting, with decreased inputs and increased outputs. To measure the endurance of
the eciency score for the evaluated unit j
0
, we introduce the indices q and r, for inputs and outputs,
respectively, as follows:
q
j
0

1
mn 1
X
n
j1
j6j
0
X
m
i1
x
U
ij
xx
ij
x
U
ij
x
L
ij
; r
j
0

1
sn 1
X
n
j1
j6j
0
X
s
r1
yy
rj
y
L
rj
y
U
rj
y
L
rj
;
where xx
ij
, i 1; . . . ; m; j 1; . . . ; n j 6 j
0
and yy
rj
, r 1; . . . ; s; j 1; . . . ; n j 6 j
0
are the input and
output levels adjusted for the competitive units by model (5), when solved for unit j
0
. The adjusted levels xx
ij
and yy
rj
are easily computed, respectively, by means of the optimal values of the variables q
ij
, v
i
and p
rj
, u
r
in
model (5) and the transformations introduced earlier in this chapter. Actually, if v
0
i
, u
0
r
, q
0
ij
, p
0
rj
; i 1; . . . ; m;
r 1; . . . ; s; j 1; . . . ; n is the optimal solution of model (5), then s
0
ij
q
0
ij
=v
0
i
; i 1; . . . ; m; j 1; . . . ; n
and t
0
rj
p
0
rj
=u
0
r
; r 1; . . . ; s; j 1; . . . ; n. The adjusted levels of inputs and outputs then take the values
xx
ij
x
L
ij
s
0
ij
x
U
ij
x
L
ij
and yy
rj
y
L
rj
t
0
rj
y
U
rj
y
L
rj
, respectively. The indices q and r are bounded between 0
and 1. The highest are the values of q and r the most endurable is the eciency score of the evaluated unit, in
terms of inputs and outputs, respectively, in a benevolent data setting for the competitive units. Particularly,
if q
j
0
1, then the unit j
0
maintains its maximal eciency score even if all the other units adjust their inputs
at the lower bounds. Respectively, r
j
0
1 means that the unit j
0
preserves its eciency score when all the
other units adjust their outputs at the upper bounds. Thus we can use the endurance indices, separately for
inputs and outputs, or an aggregate value of them (the average or a weighted average for example) to rank
the ecient units in E

. Note here that the formulae given above for computing the endurance indices are
written for the case where the entries in the n m and n s tables of input and output data, respectively, are
all interval numbers (i.e. x
U
ij
x
L
ij
6 0 and y
U
rj
y
L
rj
6 0 for all i; r; j). In case of mixtures of interval and exact
data, the summations apply only to the interval data and the average is taken accordingly.
2.4. Numerical example
To illustrate the above, consider the interval data setting of Table 1 (5 units with 2 inputs and 2 outputs)
and the eciency scores obtained by applying models (2) and (4).
D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436 29
Unit 5 is classied in E

as it is ecient in any case. Notice that this happens without being a data-
dominating unit. It dominates the other units only with respect to the second input (i.e.
x
U
2;5
< x
L
2j
; j 1; 2; 3; 4). According to the dierences h

j
h
L
j
, the ecient units in E

are ranked in the

following order: unit 3, unit 2, unit 1. For the data of our example, the same ranking of the ecient units is
derived if the endurance indices are alternatively used. In Table 2 we give the input and output levels
adjusted by model (5), when solved for unit 1. In parentheses are the corresponding values as considered,
favourably for unit 1, in model (3).
3. An extension of the interval DEA model for dealing with imprecise data
Model (2) presented in the previous section deals with interval data in DEA. We extend in this section
the interval DEA model to deal with the more general case of imprecise data, that is mixtures of interval
and ordinal data together with exact data. We do this by taking the line of Cook et al. [5]. Ordinal data are
known only to satisfy certain ordinal relations and might be given on numerical or verbal scales. To for-
mulate the general model with imprecise data, let us introduce the following notation, by which we dis-
tinguish the inputs and the outputs in cardinal (exact and/or interval) and ordinal ones:
I f1; . . . ; mg: the set of indices for inputs
R f1; . . . ; sg: the set of indices for outputs
C
I
: the subset of indices for cardinal inputs (C
I
I)
O
I
: the subset of indices for ordinal inputs (O
I
I; C
I
[ O
I
I)
C
R
: the subset of indices for cardinal outputs (C
R
R)
O
R
: the subset of indices for ordinal outputs (O
R
R; C
R
[ O
R
R)
Model (6) below deals with both cardinal (exact and/or interval) and ordinal data.
max h
j
0

X
r2C
R
u
r
y
L
rj
0
p
rj
0
y
U
rj
0
y
L
rj
0

X
r2O
R
p
rj
0
s:t:
X
i2C
I
v
i
x
L
ij
0
q
ij
0
x
U
ij
0
x
L
ij
0

X
i2O
I
q
ij
0
1;
X
r2C
R
u
r
y
L
rj
p
rj
y
U
rj
y
L
rj

X
r2O
R
p
rj

X
i2C
I
v
i
x
L
ij
q
ij
x
U
ij
x
L
ij

X
i2O
I
q
ij
60; j 1; . . . ; n;
p
rj
u
r
60; r 2 C
R
; j 1; . . . ; n;
q
ij
v
i
60; i 2 C
I
; j 1; . . . ; n;
u
r
; v
i
Pe; r 2 C
R
; i 2 C
I
;
p
rj
P0; q
ij
P0 8r; i; j;
6
Table 2
Benevolent and aggressive data adjustment for the evaluated unit 1
DMU Inputs Outputs
j xx
1j
xx
2j
yy
1j
yy
2j
1 12 (12) 0.21 (0.21) 144 (144) 22 (22)
2 14.15 (17) 0.1 (0.7) 143 (143) 28 (28)
3 12 (12) 0.16 (0.35) 157 (157) 21 (21)
4 19 (22) 0.12 (0.19) 181 (158) 25 (21)
5 14.54 (15) 0.06 (0.09) 157 (157) 28 (28)
q
1
0:73 r
1
0:25
30 D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436
ordinal relations among fp
rj
; j 1; . . . ; ng; r 2 O
R
;
ordinal relations among fq
ij
; j 1; . . . ; ng; i 2 O
I
:
Cardinal inputs and outputs are formulated exactly as in model (2) and this is reected in the rst
summation terms in the composite inputs and outputs. Ordinal inputs and outputs are represented in the
composite inputs and outputs, respectively, by ordinal variables with a unit coecient (cf. second sum-
mation terms in composite inputs and outputs). Moreover, n 1 constraints are introduced, for each or-
dinal input and output, that preserve the ordinal relations dened on the units by the ordinal data. To
clarify this issue, consider for example an ordinal output y
r
and two units, say k and l, with consecutive
ranks according to y
r
. If unit k possesses a highest rank than unit l, then the constraint that preserves this
ordinal relation takes the form p
rk
p
rl
Pd, where d is a small positive number. In case of ties (i.e. units k
and l possess the same rank), the constraint is written as p
rk
p
rl
0.
Model (2) derives as a special case of model (6) when only cardinal data are taken into consideration (i.e.
when O
R
;, O
I
;, C
R
R, C
I
I. Indeed, in the absence of ordinal inputs and outputs in model (6),
the second summations in the composite inputs and outputs are vanished and the ordinal relations are
excluded as non-applicable. Upper and lower bound eciencies, as formulated in models (3) and (4), with
the classication of units in E

; E

and E

are also applicable in the imprecise data setting, provided that

the models are expanded, as in model (6), to incorporate the ordinal data. The same holds for the be-
nevolent formulation of model (5) and the endurance indices.
3.1. Numerical example
As an illustration and for comparison purposes we applied model (6) to the example given in [6] and
presented in Table 3. Five units are considered with a mixture of imprecise and exact data (two inputs one
exact and one interval and two outputs one exact and one ordinal).
The entries of the ordinal output must be read as follows: 5 highest rank, . . ., 1 lowest rank. Model
(6) was implemented in an MS-Excel worksheet and was solved by using the Excel Solver. Two sets of
results were obtained: one for e 10
10
, d 10
6
and one for e 10
8
, d 10
6
(those in parentheses).
The corresponding results for IDEA are as given in [6]. Notice that the results obtained by both the IDEA
and our model (6) are identical in a ve-digit accuracy. In Appendix B we give the details of the linear
program solved for unit 1 together with the adjusted input/output data and the values of the ordinal
variables.
Table 3
Exact and imprecise data [6]
DMU Inputs Outputs Eciencies
j Exact Interval Exact Ordinal IDEA Model (6)
x
1j
x
2j
Y
1j
y
2j
1 100 0.6 0.7 2000 4 1 1
(1) (1)
2 150 0.8 0.9 1000 2 0.87500 0.87500
(0.87499) (0.87499)
3 150 1 1 1200 5 1 1
(1) (1)
4 200 0.7 0.8 900 1 1 1
(0.99999) (0.99999)
5 200 1 1 600 3 0.70000 0.70000
(0.69999) (0.69998)
D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436 31
4. Other extensions
The models presented in the previous sections assume that the upper and lower bounds of the interval
data are given as constants. In such an interval data setting, the inecient units (those in E

) might become
ecient if changes are made to the upper or lower bounds of their interval data. We investigate in this
section that issue, for one unit and one input at a time (the case of an output instead of an input derives
straightforwardly). Assume that unit j
0
, when evaluated by model (2), is inecient. When inputs are
concerned, unit j
0
could be turned to an ecient one by reducing further a particular input (say input k),
below the lower bound at a level-threshold of eciency xx
kj
0
. As it is xx
kj
0
x
L
kj
0
s
kj
0
x
U
kj
0
x
L
kj
0
, we can
adjust xx
kj
0
below x
L
kj
0
if we let s
kj
0
q
kj
0
=v
k
take negative values. Since v
k
> 0, it is sucient to let q
kj
0
free to
take negative values. We are then concerned in estimating the maximum xx
kj
0
that turns the inecient unit j
0
to an ecient one. This value can be achieved by estimating q
kj
0
and v
k
that maximize s
kj
0
q
kj
0
=v
k
. The
model below accomplishes this:
max z
s:t: u; v; Q; P 2 S;
q
kj
0
zv
k
P0;
7
where u u
r
; r 1; . . . ; s, v v
i
; i 1; . . . ; m, Q q
ij
, i 1; . . . ; m; j 1; . . . ; n, and P p
rj
,
r 1; . . . ; s; j 1; . . . ; n are the decision variables in vector form, the variable z represents the maximal
value of the ratio q
kj
0
=v
k
and S is the solution space formed by the following set of constraints:
X
m
i1
v
i
x
L
ij
0
q
ij
0
x
U
ij
0
x
L
ij
0
1;
X
s
r1
u
r
y
L
rj
0
p
rj
0
y
U
rj
0
y
L
rj
0

X
m
i1
v
i
x
L
ij
0
q
ij
0
x
U
ij
0
x
L
ij
0
0;
X
s
r1
u
r
y
L
rj
p
rj
y
U
rj
y
L
rj

X
m
i1
v
i
x
L
ij
q
ij
x
U
ij
x
L
ij
60; j 1; . . . ; n j 6 j
0
;
p
rj
u
r
60; r 1; . . . ; s; j 1; . . . ; n;
q
ij
v
i
60; i 1; . . . ; m; j 1; . . . ; n;
u
r
; v
i
Pe 8r; i;
p
rj
P0 8r; j;
q
ij
P0 8i 6 k; j 6 j
0
;
q
kj
0
free:
8
Model (7) is non-linear due to the last constraint. However, it is possible to solve it, by resorting to standard
LP software, with a two-stage procedure, as follows:
Stage 1. We solve the linear program
max q
kj
0
s:t: u; v; Q; P 2 S:
9
If q
o
kj
0
; v
o
k
are the values of the variables q
kj
0
; v
k
in the optimal solution of (9), then the ratio q
o
kj
0
=v
o
k
is a value
of z for which the unit j
0
becomes ecient as it satises, among others, the rst two constraints of (8). On
the other hand, z < 0 as q
kj
0
< 0. So the optimal (maximum) value of z will lie in the bounded interval
q
o
kj
0
=v
o
k
; 0.
32 D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436
Stage 2. On the basis of model (7), we perform bisection search [7] in the interval q
o
kj
0
=v
o
k
; 0 as follows. Let
z be a value of z for which the constraints of model (7) are consistent (initially z q
o
kj
0
=v
o
k
and zz a value of z
for which the constraints of (7) are not consistent (initially zz 0). Then the consistency of the constraints is
investigated for z
0
z zz=2. If they are consistent z
0
will replace z; if they are not it will replace zz. The
bisection is continued until z and zz come suciently close to each other, at a desirable degree of accuracy.
We end this iterative stage with z

z zz and u

; v

; Q

; P

that is an optimal solution of model (7) (i.e.

z

kj
0
=v

k
). The threshold of eciency xx
kj
0
derives then from
xx
kj
0
x
L
kj
0

kj
0
v

k
x
U
kj
0
x
L
kj
0
:
As an illustration consider the data set of Table 1 in Section 2.4. When the model (7) is applied to the
case of the inecient unit #4 with respect to the rst input, we get in its optimal solution q

1;4
0:034154
and v

1
0:054083, from which it derives that the level of the rst input should be adjusted to xx
1;4
17:105.
This value is the threshold of eciency with respect to the rst input. Similarly, the threshold of eciency of
the unit #4, with respect to the second input, is xx
2;4
0:1038 q

2;4
2:236360, v

2
9:637718.
Model (7), extended to incorporate ordinal inputs as described in the previous section, is also applicable
in the case of imprecise data. In such a case, evidently a cardinal input should be selected for consideration.
Applying for example model (7), with the necessary modications, to the data of Table 3 derives that the
inecient unit #2 turns to an ecient one, if the second input is adjusted at xx
2;2
0:7 (the corresponding
optimal values are q

2;2
1:429 and v

2
1:429).
A possible application of the models presented throughout the paper is to the problem of locating best
buys in a market of competitive products or services (i.e. estimating the products that oer great value-
for-money). The term value represents a composite measure of what the user gets from a product or
service, while the term money is for what the user pays for it. In the absence of individual preferences,
this problem can be formulated as an imprecise DEA model with a single input (price) and multiple outputs
(indices and performance estimates). In accordance with the DEA terminology, ecient units (products)
are those that are worth their price. As the price of a particular product can vary from dealer to dealer or
due to dierent discount policies, it is usually known to lie within a bounded interval, between the lowest
and the highest price recorded in the market. On the other hand, product outputs may be measured either
by exact values or bounded intervals (overall evaluation judgments made by dierent experts, for example)
or ordinal variables (product ratings obtained by experts or surveys). In such a decision situation, the
models discussed in this paper can determine the products that constitute best buys (ecient units) and
those that do not (inecient units). The interval form of the price may uncover products that constitute
best buys even at their highest price (i.e. products in E

class). The endurance indices on the other hand,

estimated for the products in E

class, measure the degree to which these products maintain their position
as best buys in a low pricehigh performance competitive environment. Finally, model (7) can determine
the price thresholds for the inexpedient products that step them up in the class of best buys.
5. Conclusion
We developed in this paper an alternative approach for dealing with imprecise data in DEA. As in
IDEA, we transform a non-linear DEA model to a linear programming equivalent. We do it, however, in a
completely dierent way. Contrarily to IDEA, our transformations on the variables dier and are made on
the basis of the original data set, without applying scale transformations on the data rst. Due to our
transformations, the classical CCR DEA model with exact data, in its multiplier form, derives straight-
forwardly as a special case of our imprecise DEA model. It is our specic formulation, however, that
enables us to proceed further, beyond our basic imprecise DEA models. We show that a DEA model with
D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436 33
interval data can be treated as a peculiar DEA model with exact data, where the coecients of the main
body of the constraints in the associated LPs change when a new unit comes for evaluation. We dene
upper and lower bounds for the possible eciency scores that a unit might attain in an imprecise data
setting. We then use these bounds to classify the units. Proceeding still further, we develop a post-DEA
benevolent formulation by which we evaluate the degree to which a unit can maintain its eciency score in
a favourable, for the other units, data setting. We exploit the results of the model to calculate endurance
indices for the units in order to discriminate further among the ecient units. Always based on the specic
transformations and formulations introduced in this paper, we address the problem of determining, in an
interval or imprecise data setting, input thresholds that turn an inecient unit to an ecient one.
Besides the advantage we gain from our formulations in addressing the issues summarised above, the
models we formulate are more ecient in implementation, in comparison to IDEA. Indeed, contrarily to
our model, an IDEA model must in general be reconstructed when changes are made to the data (for
example, when new units come into consideration or some units are removed). This is due to the scale
transformations employed on the data, necessary in IDEA in order to identify a unity element, maximal in
each input or output data column, which then is used as the basis for variable alterations. Our model is free
of such limitations and it can be easily implemented, even in a spreadsheet environment.
Appendix A
If h

j
0
and h
U
j
0
are the eciencies of unit j
0
obtained, respectively, by models (2) and (3), it is always
h

j
0
h
U
j
0
.
First note that if u u
r
; r 1; . . . ; s, v v
i
; i 1; . . . ; m is a feasible solution of model (3), then the
augmented solution u; v; Q; P, with
Q q
ij
; i 1; . . . ; m; j 1; . . . ; n; P p
rj
; r 1; . . . ; s; j 1; . . . ; n
and
q
ij

0; j j
0
;
v
i
; j 6 j
0
;

p
rj

0; j 6 j
0
;
u
r
; j j
0
;

is a feasible solution of model (2) and H

j
0
u; v h
j
0
u; v; Q; P. Indeed, model (3) derives straightforwardly
from model (2) by applying Q, P on it.
On the basis of the inputoutput data considered in model (3), unit j
0
is in the best possible position vis-
aa-vis the other units and thus h
U
j
0
is the highest possible eciency score that this unit can attain. So it is
h

j
0
6h
U
j
0
. Let now u
o
u
o
r
; r 1; . . . ; s and v
o
v
o
i
; i 1; . . . ; m be the optimal solution of model (3)
(i.e. H
j
0
u
o
; v
o
h
U
j
0
). Then the augmented solution u
o
; v
o
; Q; P, with Q and P as dened above, is a
feasible solution of model (2) and, therefore, it is h
j
0
u
o
; v
o
; Q; P H
j
0
u
o
; v
o
h
U
j
0
6h

j
0
. Thus h

j
0
h
U
j
0
.
Table 4
Adjusted data for unit 1
DMU Inputs Outputs
j x
1j
x
2j
y
1j
y
2j
1 100 0.6 2000 4 (3E)06)
2 150 0.8 1000 2 (1E)06)
3 150 1 1200 5 (4E)06)
4 200 0.7 900 1 (0E+00)
5 200 1 600 3 (2E)06)
34 D.K. Despotis, Y.G. Smirlis / European Journal of Operational Research 140 (2002) 2436
Table 5
The linear program deriving from model (6) for unit 1
# v
1
v
2
u
1
q
11
q
12
q
13
q
14
q
15
q
21
q
22
q
23
q
24
q
25
p
11
p
12
p
13
p
14
p
15
p
21
p
22
p
23
p
24
p
25
RHS
1 )100 )0.6 2000 )0.1 1 < 0
2 )150 )0.8 1000 )0.1 1 < 0
3 )150 )1 1200 1 < 0
4 )200 )0.7 900 )0.1 1 < 0
5 )200 )1 600 1 < 0
6 100 0.6 0.1 1
7 )1 1 < 0
8 )1 1 < 0
9 )1 1 < 0
10 )1 1 < 0
11 )1 1 < 0
12 )1 1 < 0
13 )1 1 < 0
14 )1 1 < 0
15 )1 1 < 0
16 )1 1 < 0
17 )1 1 < 0
18 )1 1 < 0
19 )1 1 < 0
20 )1 1 < 0
21 )1 1 < 0
22 )1 1 > d
23 1 )1 > d
24 )1 1 > d
25 1 )1 > d
2000 1 max obj
v
1
; v
2
; u
1
Pe, q
ij
P0, i 1; 2; j 1; . . . ; 5, p
rj
P0, r 1; 2; j 1; . . . ; 5.
D
.
K
.
D
e
s
p
o
t
i
s
,
Y
.
G
.
S
m
i
r
l
i
s
/
E
u
r
o
p
e
a
n
J
o
u
r
n
a
l
o
f
O
p
e
r
a
t
i
o
n
a
l
R
e
s
e
a
r
c
h
1
4
0
(
2
0
0
2
)
2
4

3
6
3
5
Appendix B
Table 4 presents the input/output data adjusted by model (6) when it was solved for the evaluated unit 1,
together with the values of the ordinal variables (in parentheses in the last column).
In Table 5 we give the details of the linear program solved for the evaluated unit 1. Notice that when
another unit comes for evaluation, only the objective function and the constraint #6 change accordingly.
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