NONRADIAL APPROACH TO ALLOCATING FIXED-COSTS AND COMMON REVENUE USING CENTRALIZED DEA
In this paper, a simple approach to allocating fixed costs and common revenue among different units is presented. It is based on centralized data envelopment analysis (DEA) and uses a weighted, slacks-based, nonradial metric. The approach is units-invariant and takes into account the inefficients in the assessed decision making units (DMUs). The approach works when the fixed cost is a complement of another input as well as when no other inputs exist. The proposed approach is compared with existing allocation methods using several datasets from the literature.
common revenue centralized dea fixed cost efficiency invariance units invariance