Russell measures in data envelopment analysis

Abstract

A producer who cannot vary his output enquires for possible reduction of inputs. If reduction is not possible he is efficient, otherwise inefficient. In this case the producer minimizes the total cost of production. Alternatively, if inputs cannot be varied, which is often in short run, the entrepreneur enquires for further output augmentation, if such augmentation is not possible he is efficient, otherwise inefficient. In this situation the implicit assumption is revenue maximization. However, in long run, inputs as well as outputs can be varied simultaneously, where the underlying optimization is profit maximization. If the producer neither reduces inputs nor augments outputs, production is profit efficient, otherwise inefficient.