Overall profit Malmquist productivity index under data uncertainty

Abstract

AbstractThe calculation of the overall profit Malmquist productivity index (MPI) requires precise and accurate information on the input, output, input-output prices of each decision making unit (DMU). However, in many situations, some inputs and/or outputs and input-output prices are imprecise. As such, we consider the overall profit MPI problem when the input, output, and input-output prices are imprecise and vary over intervals, showing that method (MCM 54: 2827–2838, 2011) has some shortfalls. To remedy these shortfalls, we propose another method for measuring the overall profit MPI when the inputs, outputs, and price vectors vary over intervals. That is, to calculate the overall profit efficiency intervals, cone-ratio data envelopment analysis models can be applied to the incorporated information as weight restrictions. Further, we provide a new approach to calculating the upper bound of the overall profit efficiency of each DMU. A numerical example is provided for illustrating the proposed method.