Abstract: Abstract： A new approach using Principal Component Analysis (PCA) on the efficiency improvement is proposed in order to improve the disadvantage of existing approach. Through the proposed method, the uncertainty of the subjective selection can be avoided by selecting indicators quantitatively, and the performance of non-efficient decision-making units can also be improved by projecting input and output vectors to the efficient frontier. Specific procedures of the improved method are given. Besides, an example of eight Chinese ports is presented here to verify the feasibility of the improved approach and its remarkable advantages over the existing one.

Key words: data envelopment analysis, efficiency improvement, PCA, production efficiency of ports