A novel best-worst-method two-stage data envelopment analysis model considering decision makers' preferences: An application in bank branches evaluation

Data envelopment analysis (DEA) model has been applied for evaluating bank branches and recognizing efficient and inefficient branches can help bank managers to provide appropriate strategies to improve the inefficient branches' performance. Conventional DEA models are based on the 'black box' approach. However, the process of providing services in banks is made up of interactive and interdependent processes. Additionally, some managers tend to incorporate their preferences in evaluation process. In this paper, best worst method (BWM) is used for incorporating decision maker (DM) preferences in two-stage DEA model. First, BWM model is applied to obtain the weights of inputs, intermediate measures and outputs based on DM's judgement. Second, generated weights are imposed on two-stage DEA model as additional constraints and a novel bi-objective BWM-two stage DEA model is introduced. Finally, the proposed bi-objective BWM-two stage DEA model is solved using min-max approach. To illustrate the capability of proposed model, 45 Agricultural Bank (Agribank) branches in West Azerbaijan province of Iran are evaluated. The branches' processes are considered as two stages 'production' and 'profitability' and efficiency of branches are calculated in each stage. According to the efficiencies of each sub-stage, branches are divided to four groups and recommendations are made for each group.