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DEA Is Used to Measure the Relative Efficiency of Two

question 31

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DEA is used to measure the relative efficiency of two (or more)units in different industries,such as a bank and a school.


Definitions:

Opportunity Loss

The loss of potential gain from other alternatives when one alternative is chosen.

Decision Maker's Profit

Reflects the gains realized by a decision maker after considering all costs and revenues associated with their decision.

Expected Monetary Value(EMV)

A financial concept used in decision-making to calculate the average outcome of future events, taking into account the probabilities and impacts of various possible outcomes.

State of Nature

A term referring to the possible outcomes or conditions in decision making that are not under the control of the decision-maker.

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