A fixed cost allocation approach with DEA super efficiency invariance

Due to the importance in organization management and cost research, how to allocate a fixed cost across a set of competing units in an equitable manner draw more and more attention. Cook and Zhu proposed an approach with data envelopment analysis (DEA) efficiency invariance principle to solve such allocation problems, but we will present their model does not consider the effect caused by the allocated costs on the efficiency scores of efficient DMUs. To overcome this shortcoming, by adopting super efficiency DEA model and adding a new assumption, the current paper provides a new allocation approach, which can reflect such effects well and the individual DMUs' production scales. An numerical example has shown that our approach is effective and reasonable.