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Data envelopment analysis can examine the relative efficiency of a group of hospitals. The following information from a particular study involving 7-teaching hospitals with three input and four output measures.
Input MeasuresHospital Full-Time Supply Bed-DaysEquivalent Expense AvailableNonphysicians (1000s) (1000s)A 310.0 134.60 116.00B 278.5 114.30 106.80C 165.6 131.30 65.52D 250.0 316.00 94.40E 206.4 151.20 102.10F 384.0 217.00 153.70G 530.1 770.80 215.00
Output MeasuresHospital Patient-Days Patient-Days Nurses Interns(65 or older) (Under 65) Trained Trained(1000s) (1000s)A 55.31 49.52 291 47B 37.64 55.63 156 3C 32.91 25.77 141 26D 33.53 41.99 160 21E 32.48 55.30 157 82F 48.78 81.92 285 92G 58.41 119.70 111 89
a.Formulate a linear programming model so that data envelopment analysis can be used to evaluate the performance of hospital D.b.Solve the model.c.Is hospital D relatively inefficient? What is the interpretation of the value of the objective function?d.How much patient-days of each type are produced by the composite hospital?e.Which hospitals would you recommend hospital D consider emulating to improve the efficiency of its operation?
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