Network DEA Quiz

What is the implication of structure-homogeneity in the context of Network DEA?

• It assumes all DMUs operate in the same industry.

• It presumes that all DMUs have the same organizational structure regarding divisions.

• It implies that all DMUs have a uniform efficiency score.

• It suggests that DMUs do not require internal analysis.

In the analysis of Network DEA, how is the internal structure of DMUs represented?

• Through a linear programming model focusing solely on external inputs and outputs

• By a series of interconnected black boxes representing subunits or processes

• Using a single black box that ignores the internal processes

• Through direct observation and manual assessment of each DMU's operational procedures

What role do intermediate products play in Network DEA models?

• They are considered as external factors influencing DMU performance.

• They are disregarded to simplify the analysis.

• They represent the flows between different subunits or processes within a DMU.

• They are assumed to have constant efficiency across all DMUs.

How does Network DEA address the issue of shared resources or inputs among DMU subunits?

• By allocating shared resources equally among all subunits

• Through the assumption that shared resources have negligible impact on efficiency

• By considering them as decision variables in the model to optimize DMU efficiencies

• Ignoring shared resources to focus on direct inputs and outputs only

In the context of Shared Flow DMUs, what is the significance of decision variables related to shared flows?

• They determine the external market positioning of the DMU.

• They are fixed values determined by historical performance.

• They optimize the allocation of shared flows to maximize efficiency.

• They represent the DMU's preference for certain inputs over others.

What distinguishes the input-oriented SBM objective from the output-oriented and non-oriented objectives in Network DEA?

• 1. Its exclusive focus on maximizing outputs regardless of input levels

• The emphasis on minimizing inputs while maintaining a certain level of

• 1. The objective to balance both inputs and outputs equally

• 1. Its goal to maximize both inputs and outputs simultaneously

Regarding the generic setup of Network SBM models, what is the significance of divisional weights supplied exogenously?

• They indicate the financial investment in each division.

• They reflect the relative importance of each division within the overall DMU performance.

• They are determined post-analysis to adjust for efficiency scores.

• They represent the fixed costs associated with each division.

In DEA models, what does the term 'efficiency frontier' refer to, and how is it utilized in Network DEA?

• A hypothetical maximum performance benchmark for DMUs, against which actual performances are compared

• The average efficiency score of all DMUs in the sample

• A fixed threshold of efficiency that all DMUs must achieve

• The boundary separating efficient from inefficient DMUs based on external market conditions

How does Network DEA conceptualize the role of intermediate flows within a DMU's internal structure?

• As a static measure of internal efficiency unrelated to the DEA model

• As critical links that facilitate the transformation of inputs into outputs within and across subunits

• As irrelevant to the overall efficiency of DMUs

• As variables to be minimized to improve efficiency

What challenge does the identification of a division's reference set pose in Network DEA, and how is it addressed?

• The challenge lies in determining competitive benchmarks; it's addressed through external market analysis.

• Identifying the most efficient peers involves complex calculations, often resolved by simulation techniques.

• It's challenging due to the varying sizes of divisions; this is mitigated by standardizing efficiency scores.

• The difficulty is in finding divisions with similar processes; it's addressed by defining a reference set or peer group based on intensity vectors where divisional contribution is positive.