2.4.3 Solving Envelopment DEA Model as a Linear
Program in Spreadsheets
This section describes the process of incorporating the DEA analysis into a Microsoft® Excel spreadsheet (Excel). This should prepare a new DEA user to apply it using Excel with or without the software program included in this volume. We believe this is also useful for two distinct reasons. First, it demystifies what is happening in other elaborate DEA codes or programs to emphasize that this is not a highly complex process and that it is understandable at the level of basic algebra. Second, the process is inputting or recording the equations into this excel program helps familiarize the user with the basic relationships-equations in the DEA model.
The programming elements described below are referenced to the basic DEA model to allow the reader to create and run a DEA
program that runs on Excel. This involves a few steps that may utilize Excel capability unfamiliar to the reader, but which can readily be used to develop a working DEA program if the following steps are carefully followed. The process involves the following steps:
1. Install and enable the Excel spreadsheet to use a program that is referred to as an "add-in". The "add-in" that will be enabled for
DEA is the Excel Solver. Instructions to enable the Solver to operate in your excel program are provided in Excel (the help menu item), or please refer to section 2.4.3.1.
2. The Excel solver allows you to input equations that can be maximized, minimized or just solved for. You will have
instructions herein about how to input the constraints in the
basic DEA models (2.1) and (2.2) into the Solver.
3. To run the Solver model and solve the DEA evaluations for a single unit, you will need to set a few parameters in the solver
that indicate the type of DEA analysis being performed. Instructions on which parameters to use are provided.
4. The DEA analysis to evaluate/benchmark a single service unit
compared with a set of service units can then be run. This is applied to the bank branch example described in the previous section, generating the same results attainable by hand calculations. This can be run for each of the 5 sample branch units by running the DEA program five times. To eliminate the need to rerun the Solver model each time, a task that can become tedious and costly, there are programming methods to have the program rerun itself for each service unit in the data set. This is a programming requirement that is independent of the DEA methodology and requires developing a program to rerun the analysis for every service unit in the data set.
5. The program to iteratively run the DEA analysis to evaluate the
productivity and generate the full set of analytic data on every branch in the data set is provided. Incorporating this set of commands into the Excel macro will enable you to run the full
DEA analysis on a set of data with one command. These commands are incorporated into the Visual Basic for Applications (VBA) module of Excel. VBA is the computer language that underlies much of the operating systems that are used in many programs including Excel, Word and Power Point. The reader does not need to be familiar with VBA, and indeed that is a very interesting topic that one could study independent of this topic. All the instructions to use VBA to enable the iterative DEA analysis are provided including access to an electronic version of these VBA commands that can just be copied and pasted into the excel program. This does not require understanding of VBA.
6. While we try to provide a clear path to completing a DEA analysis on your computer, a CD attached to this book will provide all the sample excel files and ready-to-use DEA
software DEAFrontier. While the CD provides a completely reliable and viable short-cut to using DEA, those interested in becoming familiar with the workings of DEA should find the following a useful way to be aware of what the DEA program is doing.
2.4.3 Solving Envelopment DEA Model as a LinearProgram in SpreadsheetsThis section describes the process of incorporating the DEA analysis into a Microsoft® Excel spreadsheet (Excel). This should prepare a new DEA user to apply it using Excel with or without the software program included in this volume. We believe this is also useful for two distinct reasons. First, it demystifies what is happening in other elaborate DEA codes or programs to emphasize that this is not a highly complex process and that it is understandable at the level of basic algebra. Second, the process is inputting or recording the equations into this excel program helps familiarize the user with the basic relationships-equations in the DEA model.The programming elements described below are referenced to the basic DEA model to allow the reader to create and run a DEAprogram that runs on Excel. This involves a few steps that may utilize Excel capability unfamiliar to the reader, but which can readily be used to develop a working DEA program if the following steps are carefully followed. The process involves the following steps:1. Install and enable the Excel spreadsheet to use a program that is referred to as an "add-in". The "add-in" that will be enabled for DEA is the Excel Solver. Instructions to enable the Solver to operate in your excel program are provided in Excel (the help menu item), or please refer to section 2.4.3.1.2. The Excel solver allows you to input equations that can be maximized, minimized or just solved for. You will haveinstructions herein about how to input the constraints in thebasic DEA models (2.1) and (2.2) into the Solver.3. To run the Solver model and solve the DEA evaluations for a single unit, you will need to set a few parameters in the solverthat indicate the type of DEA analysis being performed. Instructions on which parameters to use are provided.4. The DEA analysis to evaluate/benchmark a single service unitcompared with a set of service units can then be run. This is applied to the bank branch example described in the previous section, generating the same results attainable by hand calculations. This can be run for each of the 5 sample branch units by running the DEA program five times. To eliminate the need to rerun the Solver model each time, a task that can become tedious and costly, there are programming methods to have the program rerun itself for each service unit in the data set. This is a programming requirement that is independent of the DEA methodology and requires developing a program to rerun the analysis for every service unit in the data set.5. The program to iteratively run the DEA analysis to evaluate theproductivity and generate the full set of analytic data on every branch in the data set is provided. Incorporating this set of commands into the Excel macro will enable you to run the fullDEA analysis on a set of data with one command. These commands are incorporated into the Visual Basic for Applications (VBA) module of Excel. VBA is the computer language that underlies much of the operating systems that are used in many programs including Excel, Word and Power Point. The reader does not need to be familiar with VBA, and indeed that is a very interesting topic that one could study independent of this topic. All the instructions to use VBA to enable the iterative DEA analysis are provided including access to an electronic version of these VBA commands that can just be copied and pasted into the excel program. This does not require understanding of VBA.6. While we try to provide a clear path to completing a DEA analysis on your computer, a CD attached to this book will provide all the sample excel files and ready-to-use DEA software DEAFrontier. While the CD provides a completely reliable and viable short-cut to using DEA, those interested in becoming familiar with the workings of DEA should find the following a useful way to be aware of what the DEA program is doing.
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