Input and output reconsidered in supplier selection DEA model

Abstract

The selection of input and output items is crucial for successful application of Data Envelopment Analysis (DEA) as they should express the decision maker's preferences and perceptions of what might affect the efficiency of a decision making unit (DMU). This article addresses the question of the transformation of input and output data that may be required for efficiency analyses using DEA method. Different methods for the data transformation are available in the literature, however, they may lead to different results, which may bias the decisions. This paper attempts to provide some guidance on this issue and to compare the results. An example of supplier evaluation will be used to illustrate the possible solutions and the differences in the final results (supplier evaluated to be among the efficient suppliers).