DEA: Theory, Methods and Applications

Abstract

This chapter describes the mathematical foundations for performance expressed as an efficiency computation based on the underlying relationship between inputs and outputs, often described as productivity. It shows an increasing use of the mathematical application known as DEA, from the necessity in early days to develop a measurement tool for application in organizations which do not have a profit-driven mission yet need to operate according to principles of business efficiency. The distinction of these organizations from the more conventional commercial ventures is not only the absence of profit-driven strategies but the explicit enunciation of other less tangible objectives, often conveyed in the corporate vision statement. The tenet of this book is that if performance can be measured under the conditions of not-for-profit, how much better would such a measure be for those organizations that have the added luxury of financial and other tangible metrics.