A DEA-Based Approach for Equitable Allocation of Fixed Cost

In many applications of DEA approach, there are often fixed costs which should be assigned to a set of competing decision making units (DMUs). One nature problem then is: how can these costs be assigned in an equitale manner to various DMUs? To obtain an appropriate fixed costs allocation, in this paper we propose a DEA-based approach via maximizing the average efficiency across all DMUs and taking individual DMUs' production scales into consideration. In order to illustrate our approach, numerical results of two examples are presented in this paper.