Efficiency Measurement by the Grey DEA Approach

Nowadays, in competitive environment, a fundamental factor that helps governmental and non-governmental organizations to achieve their goals is attention to efficiency and its continuous improvement, which is only possible through continuous Efficiency Evaluation. Data Envelopment Analysis (DEA) is a suitable method for Efficiency Evaluation in organizations. But one limitation of this method is that, totality of DMUs must be at least triple that of the total number of inputs and outputs, and in practice lack of attention to this point, causes a large number of units to be inappropriately placed on the efficient frontier. The units evaluated in this paper were oil refineries of I.R. Iran active in the years 2000-2005. In this paper, using Grey clustering, indices were divided into several categories and from each category an index was selected as representative of it. Grey clustering reduced the number of indicators so that DEA could evaluate an amount for efficiency of DMUs.