Production Planning Based on DEA Profit Efficiency Models

Abstract

In this research, the authors propose DEA (data envelopment analysis) profit efficiency models for production planning which is one of important problems in the production and operations management. Different from traditional models, the constraint that the optimal output is supposed to be not less than the original one from the production possibility set is omitted in their developed no output constraint maximum profit (NOCMP) model. Besides, observing that output prices could be varied with the total market demand in the market, the researchers present the no output constraint maximum profit with varied output price (NOCMP-VOP) model. The authors apply these two DEA profit efficiency models to U.S. airline industry for illustration. The developed NOCMP and NOCMP-VOP models in this study contribute to developments of both the DEA profit efficiency model and its applications.