The Fair Revenue Allocation among the Units of an Organization Using DEA

Abstract

To develop an organization, its units must be continuously assessed, and awarded according to the assessment results. Otherwise, the inefficient units are located on the margin of safety, and the efficient units get disappointed. In this paper, a way is presented to fairly distribute a common reward among the units of organization. Using data envelopment analysis, this method establishes the share of each unit relative to its performance. To this end, first the minimum and maximum possible shares of each DMU are established. Then, a combination of them is used for identifying its final share. In this method, the shares are objectively determined regardless of personal tastes.