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Distance Function Efficiency Measures

  • Chiang Kao
Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 240)

Abstract

While management scientists were developing methods to measure efficiency based on the definition of productivity, economists were tackling the same problem using the production function. In the former, efficiency is measured as the ratio of aggregate output to aggregate input, which, from the input point of view, is equal to the smallest amount of input required to produce a given amount of output divided by the actual amount of input consumed. This idea is similar to defining an input distance function to measure the relative distance between the minimum input and the actual input as the input efficiency. From the output point of view, the output-input ratio measure of efficiency is equal to the actual amount of output produced divided by the largest amount of output that can be produced from a given amount of input. An output distance function can thus be defined to measure the relative distance between the actual and maximum outputs as the output efficiency.

Keywords

Distance Function Constant Return Slack Variable Directional Distance Production Possibility 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer International Publishing Switzerland 2017

Authors and Affiliations

  • Chiang Kao
    • 1
  1. 1.Department of Industrial and Information ManagementNational Cheng Kung UniversityTainanTaiwan

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