Efficiency Evaluation in Fuzzy Two-Stage DEA Based on Fuzzy Arithmetic Approach.

Purpose: In classical data envelopment analysis models, a production system for measuring performance is considered as a black box and no attention is paid to the internal structure of decision-making units in the process of evaluation performance. However, it is important to consider the internal structure of the units to identify sources of inefficiency to calculate efficiency. On the other hands, the observed values of input and output data in real world problems are sometimes imprecise and vague. Therefore, in this paper, the network data envelopment analysis model is used in order to evaluate the performance of decision-making units with a two-stage structure in a fuzzy environment in which input and output values are displayed in terms of triangular fuzzy numbers. Methodology: To solve the fuzzy two-stage data envelopment analysis model, the fuzzy arithmetic approach is used and a lexicographic optimization method for calculating the fuzzy efficiency of processes and the fuzzy efficiency of the system is proposed. Findings: The main advantage of the proposed approach over the exsiting approaches is that it solves fewer models for finding fuzzy efficiency. Originality/Value: The application of the proposed model is explained by evaluating the performance of 24 insurance companies. [ABSTRACT FROM AUTHOR]