An Equitable DEA-Based Approach of Allocating Fixed Costs or Resources

The problem of how to allocate a fixed cost or resource among a set of competing entities in an equitable way is a considerably important issue. Based on data envelopment analysis (DEA), the current paper proposes a new method for allocating fixed costs and resources to all decision making units (DMUs) respectively, in such a way that the relative efficiencies of DMUs remain unchanged and the distribution should reflect the individual DMUs´ performances and scales of inputs consumption and outputs production. To illustrate the method, numerical results for an example are presented in this paper.