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Generalized restructuring refers to an action in a commercial environment where a homogeneous set of units is restructured to form a new set of units in the same environment to achieve specific performance goals. Inverse Data Envelopment Analysis (InvDEA) is a useful analytical tool, based on multi-objective mathematical programming, for estimating the required levels of input/output to meet given efficiency targets. This paper develops a new InvDEA-based methodology using data in ratio form, referred to as InvDEA-R, for modeling generalized restructuring. The key advantages of the proposed models are: (i) Maintaining data confidentiality, which can encourage managers to participate in efficiency improvement through restructuring; (ii) Incorporating not only pure input and output data but also their ratios in the restructuring process, which enhances the discrimination power of the analysis and provides a reasonable endogenous weight restriction framework for incorporating expert opinion in the restructuring process. Additionally, this paper presents a DEA-R estimator model to determine the minimum efficiency targets that post-restructuring units can achieve. The developed restructuring theory is demonstrated through an application in the banking sector.
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