Evaluating Effective Performance Using Ordered Weighted Averaging and Data Envelopment Analysis Optimization
When comparing and evaluating performance, decision-makers are concerned with providing a range of effective, efficient, and fair measures that can yield representative relative rankings for the units being evaluated. In this chapter, we apply three multicriteria benchmarking modeling techniques - weighted linear combination, data envelopment analysis (DEA), and ordered weighted average (OWA) - to an example dataset to provide a quantitative assessment of performance. Evaluation of the results demonstrates that each of these techniques has relative strengths and shortcomings. To take advantage of the relative strengths, and avoid some of the shortcomings that we observed, we develop and assess a promising new methodological approach, the order rated effectiveness (ORE) model. ORE uses the OWA unit ratings within a DEA optimization framework to provide an overall relative performance assessment.
Applications of Management Science
benchmarking, benchmarking, data envelopment analysis, multi-criteria evaluation, operational effectiveness, ordered weighted average, performance measurement
Klimberg, Ronald and Ratick, Samuel, "Evaluating Effective Performance Using Ordered Weighted Averaging and Data Envelopment Analysis Optimization" (2020). International Development, Community, and Environment. 451.