The Most Revenue Efficiency with Price Uncertainty

Abstract

In this paper, a new revenue efficiency data envelopment analysis (RE-DEA) approach is considered for finding the most revenue efficient unit with price uncertainty in both optimistic and pessimistic perspectives. The optimistic and pessimistic perspectives use efficient frontier and inefficient frontier, respectively. An integrated model is introduced to find decision making units (DMUs) that can be a candidate for most revenue efficient unit, in both optimistic and pessimistic points. Consequently, the revenue efficiency of all DMUs is calculated with by solving one model. Then a mix integer programming (MIP) model is proposed for finding the most revenue efficient DMU with common set of weights. The proposed model ensures that just one unit has been revenue efficiency. To illustrate the applicability of the new approach, the model is utilized for data from 21 medical centers in Taiwan.