Stochastic Data Envelopment Analysis (DEA) models have been introduced in the literature to assess the performance of operating entities with random input and output data. A stochastic DEA model with a reliability constraint is proposed in this study that maximizes the lower bound of an entity's efficiency score with some pre-selected probability. We define the concept of stochastic efficiency and develop a solution procedure. The economic interpretations of the stochastic efficiency index are presented when the inputs and outputs of each entity follow a multivariate joint normal distribution.
Wei, Guiwu; Chen, Jian; and Wang, Jiamin, "Stochastic Efficiency Analysis with a Reliability Consideration" (2014). Faculty of Management Publications. 1.