Measuring the efficiency of production units by AHP models

The paper deals with models and methods for the evaluation of efficiency of production units. The standard modeling approach for the evaluation of efficiency is data envelopment analysis (DEA), based on the definition of efficiency as the ratio of outputs produced by the unit and inputs spent in the production process. Standard data envelopment analysis models divide the units into inefficient and efficient ones. The efficient units receive an efficiency score of 100% with standard DEA models, and can be further classified by so called super-efficiency DEA models. This paper discusses the possibility of using an AHP model with interval pairwise comparisons for the evaluation and classification of efficient units, and compares the results with super-efficiency DEA scores. The proposed approach is applied to assess the efficiency of pension funds in the Czech Republic - the results from super-efficiency DEA models and from an interval AHP model are compared and discussed. (C) 2007 Elsevier Ltd. All rights reserved.