A new project selection method using data envelopment analysis

Abstract

The project selection problem plays a vital role in an organization to successfully attain its competitive advantages and corporate strategies. The problem is more exacerbated and compounded if the decision-maker takes the limitation of resources into consideration. As a matter of fact, the project selection problem deals with opting a set of best feasible proposals from a large pool of proposals with making the best use of available resources. It is assumed that each proposal employs various resources, such as personnel, capital, equipment, and facilities. Each subset of feasible proposals constitutes a single, composite project that utilizes a set of available but limited resources to produce various outputs. It is desired to select the best subset of proposals with the aim of using the available resources as much as possible. Data envelopment analysis (DEA) is commonly used as a prioritization method to evaluate each feasible composite project. This paper develops a new project selection method based on the performance of each contained proposals by solving a single linear DEA model. Finally, we provide a real dataset containing 21 information system proposal at Iran e-commerce development center to illustrate the potential application of our suggested method.