ABSTRACT

Data Envelopment Analysis (DEA) is a mathematical programming technique that provides correct method for project evaluation and selection. DEA calculates the relative efficiency of multiple decision-making units (DMUs) on the basis of observed inputs and outputs which can be expressed with different types of metrics. The envelopment surfaces are depicted by either a constant-return-to-scale (CRS) or a variable-return-to-scale (VRS) represented in the Charnes Cooper Rhodes (CCR) and Banker Charnes Cooper (BCC) models, respectively. CRS models provide conservative measure of efficiency. Under CRS, all units are compared against a frontier defined by units operating under the most productive scale size. In Project Management, cost is considered a dimension of project performance, as is project scope or size. Specifying the DEA model is to identify the input and output variables of interest necessary to capture important differences between projects. There exist a wide variety of measures that describe the outcomes of a project and input characteristics and factors which impact project outcomes.