Using DEA Factor Efficiency Scores to Eliminate Subjectivity in Goal Programming

Abstract

Many real-world problems require decision makers to consider multiple criteria when performing an analysis. One popular method used to analyze multicriteria decision problems is goal programming. When applying goal programming, it is often difficult if not impossible to determine the target values and unit penalty weights with any level of confidence. Thus, in many situations, managers and decision makers may be forced to specify these parameters subjectively. In this paper, we present a model framework designed to eliminate the arbitrary assignment of target values and unit penalty weights when applying goal programming to solve multicriteria decision problems. In particular, when neither of these parameters is available, we show how to integrate factor efficiency scores determined from data envelopment analysis into the model. We discuss an application of the methodology to ambulatory surgery centers and demonstrate the model framework via a product mix example.