We first illustrate how to formulate the envelopment model (2.2) in a spreadsheet, and then illustrate how Excel Solver can be used to calculate the efficiency for the bank branches in Table 2-2.
We begin by organizing the data in Table 2-2 in a spreadsheet as shown in Figure 2-2. A spreadsheet model of DEA model (2.2) contains the following four major components: (1) cells for the decision variables ( Aj ); (2) cell for the objective function (efficiency, e); (3) cells containing formulas for computing the DEA efficiency reference set (the left-hand-side of the constraints) ( L: =1 /L1 xi/ and
L: =1 1L1 y ,1 ); and (4) cells containing formulas for computing the service unit under evaluation (right-hand-side of the constraints) ( e xio
and Yro)