Two-Stage Network Processes: DEA Frontier Identification
The current chapter focuses on how to identify DEA frontier when decision making units (DMUs) are in forms of two-stage network processes. In these two stage network processes, all the outputs from the first stage are intermediate measures that make up the inputs to the second stage. Due to the existence of intermediate measures, the usual procedure of adjusting the inputs or outputs by the efficiency scores, as in the standard DEA approach, does not necessarily yield a frontier projection. The current chapter presents an approach for determining the frontier points for inefficient DMUs within the framework of two-stage network processes.