DEA Fixed Cost Allocation Method Based On Non-egoistic Principle

Fixed cost allocation is the process by which an organization allocates the fixed costs to different members of an organization.Fixed cost allocation has a wide range of application backgrounds.For example,multinational companies need to distribute the cost of public information system among subsidiaries,and commercial banks are supposed to share the construction cost of the credit information sharing system.Since the cost can be regarded as an input element,which directly affects the performance evaluation of the members of each organization,how to allocate the costs to the members has been one of the important research topics in the field of management science.The data envelopment analysis method has the many features,such as weight flexibility,non-parametric attributes and dimensionless property,and this method can study the impact of feasible allocation schemes on efficiency assessment.Therefore,the use of data envelopment analysis methods to deal with fixed cost allocation has become a hot research topic in recent years.The method of fixed cost allocation is different in various of decision-making environments.In a centralized decision-making environment,due to the existence of a central decision-maker,the allocation scheme is often obtained by aiming at maximizing the overall efficiency.In a decentralized decision-making environment,owing to the lack of a powerful central decision maker,each decision-making unit(DMU)might propose an allocation scheme that is beneficial to itself.However,this egoistic allocation is unfair for other DMUs and is difficult to be approved by other DMUs.One of the main research of this paper is to propose a new fixed cost allocation model of single-stage system considering the impact of fairness factors on the allocation scheme.In this dissertation,we first finds the cost allocation scheme proposed by each DMU on the basis of the non-egoistic principle that requires the DMU that proposes the allocation plan to bear the maximum cost to obtain the approval of other decision-making units for the cost allocation plan,then constructs cost allocation interval by analyzing the expectations of allocated cost of each DMU,and further proposes a new fixed cost allocation model of single-stage system.The research shows that the allocation scheme obtained by method in this paper is more fair,which is easier accepted by the DMUs.The problem of fixed cost allocation exists not only between decision-making units in a single-stage production system,but also within decision-making units in multi-stage production processes.The fixed cost allocation of the two-stage system is the second part of this paper.Currently,there are few studies on the fixed cost allocation of the two-stage system,and most of these studies are based on the principle of efficiency invariance or the satisfaction degree,which do not consider the fairness of fixed cost allocation.In this dissertation,we first proposes parallel organizational structure and group organizational structure based on different organizational modes,and gives the definition of the non-egoistic principle of the corresponding structure according to the characteristics of the two organizational structures,then the upper bounds of cost of the system and each stage are obtained,next two new two-stage DEA models for fixed cost allocation models are proposed,respectively.The research shows that this method can provide a more fair cost allocation scheme for two-stage system with different organizational structures.The fixed cost allocation method of single-stage system proposed in this paper takes into account the expectations of cost allocation of each decision-making unit,and introduces the non-egoistic principle into the method to obtain a fairer cost allocation interval.Another proposed two-stage system fixed cost allocation method analyzes the characteristics of different organizational modes and provides a more scientific and reasonable fixed cost allocation scheme for decision makers in parallel and group organizational structures.The main innovations of this study are as follows:1)Construct the interval of allocated cost through the principle of non-egoistic,which makes the fixed cost allocation scheme more reasonable and can be accepted by all decision-making units.2)The existing literatures fixed cost allocation of two-stage system do not discuss the different organizational structures,while this paper proposes the parallel organization structure and the group organization structure according to the actual production situation,and explains different decision-making behaviors corresponding to different organization structures.3)The fixed cost allocation model of two-stage system proposed in this paper applies the non-egoistic principle to the two-stage system,which considers the fairness of the allocation scheme,making the allocation schemes easier to be accepted.