10.30495/fomj.2022.1961622.1072

Extending Allocation Stages of Fixed Costs Between Decision Making Units Using DEA

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  • Hassan Rostamzadeh*1,
  • Ali Reza Fakharzadeh Jahromi2,
  1. Optimization, Mathematics,Shiraz university of technology,Shiraz,Iran
  2. Department OR, Faculty of Mathematics, Shiraz University of Technology, Shiraz, Iran

Revised: 2022-06-22

Accepted: 2022-07-30

Published in Issue 2022-07-30

How to Cite

Rostamzadeh, H., & Fakharzadeh Jahromi, A. R. (2022). Extending Allocation Stages of Fixed Costs Between Decision Making Units Using DEA. Fuzzy Optimization and Modeling Journal (FOMJ), 3(2), 51-61. https://doi.org/10.30495/fomj.2022.1961622.1072
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Abstract

A good idea for a decision maker to protect and increase the efficiency of the decision-making units (DMUs) in an organization, is to allocate the fixed costs between them based on their efficiencies. Since, data envelopment analysis (DEA) is a suitable method to calculate the efficiency, allocating fixed costs to DMUs based on the two-stage network DEA (NDEA) approach is done by researchers. But due to some limitations (like producing a product in several steps, receiving incomes in several stages and etc) and some organization necessities, it is impossible to do this allocation just in two-stages. In this paper, we suggest a model for allocating the fixed cost among DMUs in more than two-stage network DEA approach, so that more than allocating the fixed cost, increasing in efficiency is also considered. Also, a benchmark example in reality is presented to illustrate the model and its applications.
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