Target Setting in Production Technologies with Multiple Component Processes

Abstract

In this paper, we consider non-parametric production technologies with multiple component production processes, where each component uses both specific and shared inputs to produce specific and shared outputs. Investigating the issue of target setting within these technologies, we show that how efficient benchmarks for in-efficient units within the multi-component production technologies can be obtained by using basic envelopment and multiplier Data Envelopment Analysis models. Furthermore, we formulate efficient frontier of multicomponent technology and develop a mixed integer optimization model that obtains closest targets for each in-efficient activity. The proposed models are finally illustrated on a real data set consisting 102 public universities in the UK.