LAUSR

Abstract In basic data envelopment analysis (DEA) models the status of input and output measures are exactly known and given. However, in certain cases, some factors could play either input or output roles that are referred to as flexible measures. The existing approaches to deal with flexible measures solve two models for each DMU to rank the DMUs, one to classify flexible measures, and another to estimate efficiency scores. Moreover, these approaches ignore the role of non-Archimedean epsilon in the performance evaluation process. In this paper, we develop a novel mixed binary linear DEA model to classify the flexible measures and find the best DMU. Moreover, we propose an approach to find a suitable epsilon value for our developed model and suggest a new algorithm to find and rank all efficient units. An interesting case study in Tehran Stock Exchange is provided to illustrate the potential application of our new approach.