Directional returns to scale in data envelopment analysis

In evaluating the DMUs, two factors, namely the efficiency and the production size, are considered. When the production size of a unit is not optimal, its RTS determines that changing the resources in which direction, would enhance its productivity. In most past research, RTS is considered to be increasing or decreasing, and frontier analysis is used to determine it. In this paper, a method based on MPSS is developed that in addition to determining the RTS for each unit in a directional manner, the shortest changes in resources for achieving the suitable production size are also obtained. In this approach, the computational complexity and ambiguity in the unit’s RTS are absent.