Abstract

This study proposes a methodology for the allocation and management of university financial resources by consideration efficiency as its objective, and then investigates effect of this allocation of fixed resources or costs on types of efficiencies. In available methods, the fixed cost is regarded as a new input in the evaluation of efficiency, but if inputs are different kinds of costs, then it is obvious that the fixed cost is a complement of other inputs rather than an extra independent input. Therefore, it is suitable to combine the allocated cost with other cost measures in cost allocation problem. Based on it, the study develops a data envelop analysis (DEA)-based approach to allocate the fixed cost among various decision making units (DMUs). The proportion of each input in the individual DMUs is determined uniquely, and the technical and scale efficiency of each DMU became equal before and after allocation. But cost efficiency of universities has changed, despite increase in inputs of all DMUs while overall average of cost efficiency improved.

Key words: Data envelopment analysis (DEA), fixed cost, allocation cost, resource management, technical efficiency, scale efficiency, cost efficiency.