Evaluating Cost Efficiency Using Fuzzy Data Envelopment Analysis method

Cost efficiency models evaluate the ability of decision-making units (DMUs) to produce current outputs at minimal cost. In real applications, the observed values of the input-output data and their corresponding input prices are imprecise and vague. This paper employs a fuzzy data envelopment analysis (Fuzzy DEA) method to study cost efficiency of DMUs. In previous studies on the cost efficiency, no attention has been paid to the issue of ranking problem in fuzzy environment. In addition, adequate accuracy is ignored in regards to appropriate range of fuzzy cost efficiency scores. In this study, the proposed method is applied to assess fuzzy cost efficiency in accordance with the -level based approach. In this method, data information is considered as triangular fuzzy numbers. The main idea is to convert the fuzzy DEA model into a family of parametric crisp models to estimate the lower and upper bounds of the -cut of the membership functions of the cost efficiency measures. Moreover, the problem of ranking DMUs is investigated based on the fuzzy cost efficiency, using a new method. Finally, the proposed method is illustrated applying a numerical example, and then comparisons between the proposed method and previous approaches are carried out.