target setting: a generalized concept of centralized resource allocation

In this article, we first survey the relationship between lozano and villa’s centralized resource allocation (cra) and marmolinero’s simplified models. then, we show how to obtain an optimal solution to the cra model via the simplified model. moreover, we propose a novel model by simplifying phase ii of lozano and villa’s model. this proposed model determines a peer efficient unit for each decision making unit (dmu) through some simple computations. the proposed simplified models help us to clarify some ambiguities in the cra method and propose some solutions to solve them. considering the importance of target setting in the management, we formulate another new model such that by preserving the aim of the cra model, also projects dmus onto efficient frontier according to desirable target as much as possible. the proposed model is illustrated by using a data set of earlier literature.