STABILITY OF RETURNS TO SCALE AND EFFICIENCY CLASSIFICATIONS IN FDH MODELS

Stability analysis of the decision making unit (DMU) under evaluation is one of the topics of interests in free disposal hull (FDH) models. This paper provides stability intervals for preserving the returns to scale (RTS) classification and efficiency classification (in the sense of dividing DMUs into efficient and inefficient) in FDH models. In other words, in the input-oriented model, a DMU will remain efficient or inefficient and will preserve its RTS classification if and only if the outputs change in the stability interval. The results of the study have been exemplified by the data set obtained from 14 hospitals