The transformation function, technical efficiency, and the CCR ratio.
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| Title: | The transformation function, technical efficiency, and the CCR ratio. |
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| Authors: | Ray, Subhash C1 (AUTHOR) subhash.ray@uconn.edu |
| Source: | European Journal of Operational Research. Oct2019, Vol. 278 Issue 2, p422-429. 8p. |
| Subjects: | MIMO radar, Industrial productivity, Returns to scale, Aggregation operators, MIMO systems, Economies of scale, Data envelopment analysis |
| Geographic Terms: | Rhodes (Greece : Island) |
| Abstract: | • The Charnes, Cooper, rhodes ratio is a productivity measure. • The Charnes, Cooper, rhodes measure is ratio of ratios. • It also measures the distance from the tangent hyperplane. • Intercept in the dual measure relates to the 'Degree of increasing Returns'. Charnes, Cooper, and Rhodes define the ratio of the virtual output to the virtual input as a measure of the technical efficiency of a multiple output multiple input firm. The aggregation weights used in construction the virtual output and the virtual input may be arbitrarily chosen so long as the weights are non-negative and using these weights no firm's input-output bundle shows efficiency exceeding 100%. In production economics, the ratio of aggregate output to aggregate input is a measure of total factor productivity and a direct link of the Charnes, Cooper, and Rhodes ratio to technical efficiency is not obvious. Usually the ratio measure is rationalized as efficiency by showing its equivalence to the Farrell efficiency measure. This paper offers a direct derivation of the ratio measure of efficiency from a transformation function. We also show how Banker, Charnes, and Cooper measure under variable returns to scale can be derived from the transformation function. [ABSTRACT FROM AUTHOR] |
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| Database: | Engineering Source |
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