a new approach to marginal rate analysis in dea with a focus on maintaining profitability

Analyzing the effects of marginal changes in input and output variables—referred to as throughputs on economic outcomes is a critical concern in both economic theory and practice. marginal rates (mr) play a key role in assessing the sensitivity of economic systems to such variations. this study enhances a recently introduced data envelopment analysis (dea) model, originally developed for profitability assessment, by incorporating marginal rate analysis within its framework. a binary-variable-based methodology is proposed to examine the marginal rates, enabling the simultaneous evaluation of how minor variations in one throughput affect others. by leveraging the concept of profitability in dea, the proposed approach provides a comprehensive explanation of how decision-making units (dmus) attain and sustain profitability. the proposed mixed mr model offers a robust analytical tool for examining the interdependencies between performance indicators within efficient units. an empirical application involving branches of an iranian bank demonstrates the effectiveness of the method in revealing the influence of individual indicators on one another in efficient operational contexts.