Centralized resource allocation based on cross-evaluation considering organizational objective and individual preference
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Centralized resource allocation based on cross‑evaluation considering organizational objective and individual preferences Menghan Chen1 · Sheng Ang1 · Lijing Jiang1 · Feng Yang1 Received: 24 September 2019 / Accepted: 5 February 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Centralized resource allocation is one of important ways for a central organization to control and manage its subordinate organizations. Among various allocation methods based on data envelopment analysis (DEA), the cross-efficiency DEAbased iterative method generates allocation results using peer appraisal which considers the preference from all individual decision-making units (DMUs). However, the planned outputs target from the existing method cannot be achieved under the restrictions of current technology and productivity level. In this study, we propose a new cross-evaluation-based resource allocation approach to address the issue. Our approach not only is preferred by all individual DMUs but also always generates achievable input–output targets. Furthermore, we consider a centralized decisionmaking case in which an overall goal of whole organization could also be incorporated. The model is also extended to a special case of input resource allocation, namely independent procurement where funds are distributed among DMUs and DMUs use the distributed parts to raise and allocate their own input factors by themselves. Two examples are employed to illustrate our approaches. Keywords Centralized resource allocation · Individual preference · Organizational objective · Independent procurement · Data envelopment analysis
* Sheng Ang [email protected] Menghan Chen [email protected] Lijing Jiang [email protected] Feng Yang [email protected] 1
School of Management, University of Science and Technology of China, 96 Jinzhai Road, Hefei 230026, Anhui, People’s Republic of China
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1 Introduction In real world, there are usually some homogeneous decision-making units (DMUs) which are affiliated to an organization or supervised by a central unit; for example, several bank branches affiliated to a same bank group and the national universities in a country supervised by the ministry of education (Lozano and Villa 2004). For these cases, centralized resource allocation can be a crucial way for the central unit to supervise or control its subordinate DMUs. Usually, the central unit purchases or collects input resources uniformly and then distributes the centralized resources among its affiliated DMUs with the consideration of certain objectives as well as input limitations and output possibilities (Du et al. 2014; Yu and Hsiao 2018). In centralized resource allocation, data envelopment analysis (DEA), a nonparametric approach initialed by Charnes et al. (1978), has been widely used. Advantages of the use of DEA for resource allocation include that (1) DEA can formulate a production possibility set (PPS) and provide a feasible production plan for each DMU in next t
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