Hi! DEA newbie here. How do I compute the technical efficiency of DMUs in Microsoft Excel if I have 2 or more outputs? I'm going for an output-oriented DEA with VRS assumptions, as suggested. Thank you very much.
Jolai Garcia
1. Set up your Excel spreadsheet: Create a table with the DMUs in the rows and the input and output variables in the columns.
2. Calculate the normalized values: Normalize the input and output variables to ensure that they are on a comparable scale. This can be done using various methods such as min-max normalization or z-score normalization. Apply the chosen normalization method to each variable column.
3. Set up the DEA model: Create a new worksheet or section in your spreadsheet to set up the DEA model. In this section, you will define the linear programming problem for each DMU.
4. Specify the objective function and constraints: In the DEA model section, set up the objective function and constraints based on the VRS assumptions. The objective function maximizes the efficiency score for each DMU, and the constraints ensure that the DMUs are efficient relative to each other. These constraints typically involve the normalized input and output values.
5. Solve the DEA model: Use Excel's Solver add-in or any linear programming solver tool to solve the DEA model. Set the solver to maximize the objective function while satisfying the defined constraints.
6. Retrieve the efficiency scores: Once the DEA model is solved, the efficiency scores will be obtained as the solution. These scores represent the technical efficiency of each DMU relative to the others. You can copy the efficiency scores back to the original table or create a new column to display the efficiency scores.
Good luck: partial credit AI
Jolai Garcia
DEA Newbie? Calculate TE in Excel (VRS, 2+ Outputs):
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