Developing a new cross-efficiency model with undesirable outputs for supplier selection

Inappropriate selection of suppliers will have an adverse impact on the overall performance of the firm. One of the techniques that can be used for selecting supplier is data envelopment analysis (DEA). Traditional DEA models such as Charnes-Cooper-Rhodes and Banker-Charnes-Cooper can only measure radial efficiency (weak efficiency). To measure strong efficiency in DEA, Tone (2001) proposed slacks-based measure (SBM). This model deals directly with the input excesses and output shortfalls. The objective of this paper is to propose a neutral SBM with undesirable outputs for selecting the best supplier. A numerical example demonstrates the application of the proposed model.