Ranking Decision Making for Eco-Efficiency Using Operational, Energy, and Environmental Efficiency

Abstract

The objective of this paper is to propose a method for evaluating the eco-efficiency of business organizations. In order to adequately capture the inherent properties of eco-efficiency, we present a decision support model that can evaluate an organization based on ranking the derived efficiencies at the operational, energy, and environmental dimensions and taking these factors into account comprehensively. The proposed model was designed in the form of a combination of data envelopment analysis (DEA) and TOPSIS, and we tried to make use of the advantages of each method and offset the disadvantages. Specifically, the operational, energy, and environmental efficiencies were derived through DEA. Then, each efficiency was set as the criteria, and the eco-efficiency ranking was determined through TOPSIS. This study shows that it has the advantage of not requiring preference information from the decision maker and, at the same time, can improve the discriminatory power between efficient and inefficient decision-making units. To apply the proposed model, the analysis results are presented through an illustrative example, and the theoretical significance is described. It is also explained that the proposed model can provide a more realistic and convincing evaluation.