Clustering DMUs by projecting them onto the nearest MPSS

Cluster analysis in data envelopment analysis (DEA) is determining clusters for the units under evaluation regarding to their similarity. which measure of distances define their similarities. Over the years, researches have been carried out in the field of clustering of DMUs. In this paper, an algorithm for clustering units using projecting them on the frontier is presented. In fact, we gained for every decision making unit (DMU), nearest most productive scale size (MPSS) as target, to find number of clusters 2 method applied. Silhouette index was used to measure similarity value for our clustering. Numerical examples are provided to illustrate the proposed method and its results.