Here’s an example of a decision-making problem related to education: Efficiency Assessment of Risk Management Practices in Insurance Companies
Using DEA, the efficiency of each DMU in risk management practices can be evaluated. The analysis involves comparing the input-output relationship of each DMU to determine their relative efficiency. The DEA model calculates efficiency scores and identifies the most efficient DMUs, which serve as benchmarks for the less efficient ones.
The efficiency assessment helps insurance companies identify areas of improvement in risk management practices and learn from the best-performing companies. It enables them to optimize the utilization of inputs to achieve desired outputs and enhance overall risk management effectiveness.
Efficiency Assessment of Risk Management Practices in Insurance Companies
2. Determining the model, Inputs, Outputs & DMUs
In this step, the model, Inputs, Outputs & DMUs are determined:
Number of inputs: 3
Number of outputs: 3
Number of DMUs: 30
Financial Resources (in USD)
Skilled Workforce (number of employees)
Information Systems (technology infrastructure)
Risk Mitigation Effectiveness
Financial Performance (in USD)
3. Create matrix
After determining Inputs, Outputs & DMUs, the decision matrix is formed. The table below shows the decision matrix.
3. Run software:
The data is placed in the software and the software is executed. The following video shows the implementation of the software:
4. Get Result
In this step, you can see the result of the report. The report is presented in three types of formats: online report, Excel and Word. You can view or download three types of formats below.
You can also run your project in DEA online software: