AN IMPROVEMENT TO THE RELATIVE EFFICIENCY WITH PRICE UNCERTAINTY: AN APPLICATION TO THE BANK BRANCHES

This article describes the method of measuring relative efficiency, when the input and output prices are unknown. In a situation, where only the bound of input prices for the cost efficiency and the bound of output prices for the revenue efficiency are known, measurement of relative efficiency consists of two cases: optimistic and pessimistic perspective. The main object of this article is to study the pessimistic relative efficiency that eventually, with the computation of assessment of optimistic, it gives an interval efficiency for each DMU. Finally we apply the method in the analysis of bank branches activity.