Research On The Fixed Cost Allocation Based On Two-stage Network DEA

With the globalization of the economy,enterprises are increasingly inclined to cooperate with each other in order to reduce the risk of certain high investment,For example,the bank headquarters develop a public trading platform due to business needs,which the bank branch will use to achieve the successful completion of business,Each branch office gains revenue because of this public trading platform,so the branch should share the cost paid by the headquarters.Therefore,how to allocate the fixed cost to each branch is one of the focuses of the managers and scholars.This article first summarizes the concept,classification and characteristics of cost and fixed cost.Secondly,the DEA method is briefly introduced.Then the DEA of the two-stage network structure is analyzed in the terms of the inputs/outputs and the efficiencies of the two aspects of a detailed review.Based on a two-stage network process with shared input resources to both stages[1],this paper develops models for DMUs that add and allocate fixed cost as an additional input in each stage.the efficiency value of DMUo at the first and second stages can be calculated by tranditional DEA model,the DMUo's overall efficiency value is the weighted average of efficiency at two stages.We proved that when the lower bounds of ?i2 and ?d are zero,there at least exists a set of common weights that makes the overall efficiency value of all DMUj equals to one.Namely,some allocation plans can make all DMUj efficient,when the lower bounds of ?i2 and ?d is not zero,it cannot be guaranteed that there must be a set of common weights which makes all DMUj as(weak)decision unit.However,under most circumstances,at least one set of common weights which makes all DMUj as effective(weak)decision units.For the case of there must be a set of common weights which makes all DMUj as effective(weak)decision unit,this study defines the concepts of satisfaction,positive / negative ideal solutions and proximity degrees for the case where there is at least one set of common weights so that the overall efficiency value of all DMUs is 1.This paper develops three different allocation procedures to impose secondary goals,such as maximizing minimum satisfaction,minimum the distance of satisfaction with desirable results and undesirable results,maximizing minimum proximity degree.For the case that there isn't a set of common weights which makes all DMUj as(weak)decision unit.,This study designs a multi-step fixed cost allocation scheme.