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1. Data envelopment analysis can measure the relative efficiency of a group of hospitals. The following data from a particular study involving seven teaching hospitals include three input measures and four output measures. Input Measures Full-Time Supply Bed-Days Equivalent Expense Available Hospital Nonphysicians (1000s) (1000) 372.0 161.50 139.20 334.2 171.40 128.20 198.2 157.60 78.62 300.0 379.20 113.30 247.7 181.44 122.50 460.8 260.40 184.40 636.1 925.00 258.00 Output Measures Patient-Days Patient-Days (65 or older) (under 65) Nurses Interns Hospital (1000s) (1000s) Trained Trained 66.37 59.90 349 45.17 66.76 187 39.49 30.92 169 40.24 50.39 192 25 38.98 66.36 188 98 58.44 98.30 342 110 70.09 143.64 107 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. Where does the composite hospital have more output than hospital D? How much less of each input resource does the composite hospital require when compared to hospital D? e. Which hospitals would you recommend hospital D consider emulating to improve the efficiency of its operation? 56 31 133

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