Abstract: This article combines two techniques: data
envelopment analysis (DEA) and Factor analysis (FA) to data
reduction in decision making units (DMU). Data envelopment
analysis (DEA), a popular linear programming technique is useful to
rate comparatively operational efficiency of decision making units
(DMU) based on their deterministic (not necessarily stochastic)
input–output data and factor analysis techniques, have been proposed
as data reduction and classification technique, which can be applied
in data envelopment analysis (DEA) technique for reduction input –
output data. Numerical results reveal that the new approach shows a
good consistency in ranking with DEA.