DEA-RAM - Range-Adjusted Measure of Inefficiency

Overview

RAM is a non-radial DEA model using range-adjusted weights for input/output slacks. Unlike CCR/BCC (radial), RAM accounts for all slacks simultaneously. ρ=1 means fully efficient; ρ<1 quantifies normalised distance to frontier. Requires VRS (Σλ=1). Insensitive to units of measurement.

Output

Efficiency, higher is better

Data

Crisp

Size

3+ alternatives, p+s ≤ m/3 criteria works best

Used for

Education performance, healthcare benchmarking, public sector efficiency, returns to scale identification

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Assumptions to verify

• All inputs and outputs non-negative
• No constant column (zero range would produce undefined weight)
• VRS assumption is appropriate (Σλ=1 enforced)

Edge cases and pitfalls

• Constant input/output column causes zero range weight (division by zero in weight computation). Remove or merge such variables.

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