Resource allocation and target setting based on DEA with managerial disposability: evaluation and optimization the greenhouse gas emissions reduction in international airlines

In resource allocation and target setting problems, a central planner decision making from a managerial point of view has a pivotal role, especially in presence of undesirable outputs such as greenhouse gas emissions. In these situations, firms have to incorporate to each other to achieve the goals of the central planner. The existing DEA-based resource allocation models have not considered the influence of managerial effort and technology innovation. In this study, we will use the managerial disposability assumption to reflect the central planner managerial achievement and technology novelty perspective in the process of resource allocation and target setting.

Using a managerial disposability assumption in this paper offers a solution to a correct and acceptable resource allocation and target setting along with improving the performance of units. To analyze the method presented in this paper, the data of 29 famous international airlines representing the global aviation industry have been selected and studied.

The results of this study show that in this model, decision-making units use managerial disposability assumption in the regulation of undesirable outputs based on the perspective of cooperation strategies to improve their environmental performance. In addition, in this approach increasing the inputs, fixing the amount of the desirable outputs, reducing the amount of undesirable outputs will be allowed. This model ensures that the adjusted decision-making units in the next period, will improve their efficiency after resource allocation and target setting, as well as improving the overall efficiency is observed in the results obtained by this method.

The paper presents a new approach of resource allocation and target setting based on data envelopment analysis which considers the impact of managerial effort and technology innovation on resource allocation and target setting problems.