Cross-efficiency in the additive DEA model for supplier evaluation

Abstract

When selecting a supplier, it may be important to establish a supplier ranking that reflects the adequacy of each supplier's performance. The literature recommends several methodologies to solve the problem. One of these is Data Envelopment Analysis (DEA), which is a non-parametric method. The purpose of this paper is to provide an example of how to prepare the information in the supplier's offer for the DEA model to carry out the modeling. One of the biggest difficulties is that the general model of DEA only measures efficiency, but the basic model is not suitable for ranking. However, DEA's cross-efficiencies make it possible to establish the order between suppliers in addition to determining efficient suppliers.