TARGET SETTING – FREE DISPOSABLE HULL (FDH)

Y.M. Chenna Reddy; C. Subbarami Reddy

Volume : V, Issue : XII, December - 2015

TARGET SETTING – FREE DISPOSABLE HULL (FDH)

Y. M. Chenna Reddy, C. Subbarami Reddy

Abstract :

Data Envelopment Analysis provides both short–run and long–run targets to the inefficient firms. It also identifies the efficient peer of the inefficient firm which is a convex combination of more than one efficient firms. If bench marked targets suggest extensively restructure organization, the inefficient of firm hesitates persuasion, inspite of the fact that the available bench marking information is useful. The Free Disposable Hull provides shorter targets then the convex production possibility set. This study provides targets to inefficient firms projecting the inefficient production plan onto FDH frontier choosing directional distance function input approach. The closed form solutions derived for FDH technology are implemented in a study of 16 total manufacturing sectors of Indian states.