Evaluating relative value of customers via data envelopment analysis

The purpose of this paper is to propose a data envelopment analysis (DEA) method for customers' evaluation.

This paper introduces a variable return to scale (VRS) cross‐efficiency (one of the DEA models) to evaluate customers. This new model can consider ratio values and give a complete ranking of customers.

It is found that the proposed model can evaluate customers in a multi criteria context; does not demand weights from the decision maker; and can consider both the ratio and absolute numbers. An aggressive form of the VRS model is formulated to evaluate the peer‐appraisal value of customers instead of self‐appraisal.

To the best of the authors' knowledge, there is no reference that uses cross‐efficiency model with the ratio values for customers' evaluation.