Ranking electricity distribution units using slacks-based measure, strong complementary slackness condition, and discriminant analysis

This study integrates SBM (slacks-based measure), SCSC (strong complementary slackness condition), and DEA-DA (data envelopment analysis-discriminant analysis) to rank electricity distribution units in Iran. DEA is a popular technique that many researchers use it to evaluate the performance of different organizations in public and private sectors. As conventional DEA models do not fully exploit information of all inputs and outputs, they result zero in many multipliers. These DEA models may yield many efficient decision making units (DMUs). This decreases discrimination power of the DEA. To rectify this shortcoming, this study proposes a novel application of SBM-DEA/SCSC along with DEA-DA to reduce number of efficient DMUs. Using the proposed approach, electricity distribution units are classified into efficient and inefficient groups based upon their efficiency scores. Then, DEA-DA is utilized to rank efficient DMUs. Sensitivity analysis validates the proposed approach.