Which of the following describes Data Envelopment Analysis (DEA).
A) DEA finds the most effective company among some set of companies.
B) DEA determines if a company is converting inputs to outputs as effectively as possible.
C) DEA determines how effective a company converts inputs to outputs compared to other companies.
D) DEA compares how effective a company converts inputs to outputs compared to a benchmark composite of all companies.

Question

Quizplus · Accepted Answer

DEA determines how effective a company converts inputs to outputs compared to other companies. It is a non-parametric method used to determine the relative efficiency of decision-making units (DMUs). DMUs could be companies, organizations, schools, hospitals, etc. DEA evaluates the efficiency of DMUs with multiple inputs and outputs by comparing them to each other.

Which of the Following Describes Data Envelopment Analysis (DEA)