Goal directed benchmarking for organizational efficiency

Abstract

In this paper, we extend the standard data envelopment analysis (DEA) model to include longer term top management goals. This extension is in recognition of the fact that benchmarking for decision making units (DMUs) is more than a purely monitoring process, and includes a component of future planning. The new model uses a goal programming structure to find points on the efficient frontier which are realistically achievable by DMUs, but at the same time achieving a closer approach to long term organizational goals (as distinct from the local performance of individual DMUs). Consideration is given to the possibility of adjusting constraints on the DMU by investment in extended inputs or new technologies, in which case minimization of associated investment costs becomes an additional management objective.DEA Goal programming Multicriteria