Fuzzy Real Investment Valuation Model for Giga-Investments, and a Note on Giga-Investment Lifecycle and Valuation

Very large industrial real investments are different from financial investments and from small real investments, even so, their profitability is commonly valued with the same methods. A definition of a group of very large industrial real investments is made, by requiring three common characteristics. The decision support needs arising from these characteristics are discussed and a summary of existing methods to value and to provide decision support for large industrial investments is presented. A model built specifically to support investment decisions of very large industrial real investments and a numerical application of the model are presented. The model is discussed and commented. A note is made on an observation regarding the giga-investment lifecycle and its effect on giga-investment valuation.Large industrial investments; Profitability analysis; Fuzzy corporate finance; Capital Budgeting

A Constrained, Possibilistic Logical Approach for Software System Survivability Evaluation

In this paper, we present a logical framework to facilitate users in assessing a software system in terms of the required survivability features. Survivability evaluation is essential in linking foreign software components to an existing system or obtaining software systems from external sources. It is important to make sure that any foreign components/systems will not compromise the current system’s survivability properties. Given the increasing large scope and complexity of modern software systems, there is a need for an evaluation framework to accommodate uncertain, vague, or even ill-known knowledge for a robust evaluation based on multi-dimensional criteria. Our framework incorporates user-defined constrains on survivability requirements. Necessity-based possibilistic uncertainty and user survivability requirement constraints are effectively linked to logic reasoning. A proof-of-concept system has been developed to validate the proposed approach. To our best knowledge, our work is the first attempt to incorporate vague, imprecise information into software system survivability evaluation

A fuzzy quality cost estimation method

Quality cost control is one of the most important aspects in the development of a quality management system. This paper presents a method for the estimation of quality cost that aims to take into account the so-called hidden quality costs, which are typically unobserved or unknown. Although this is a subject that has already been approached in other studies, subjectivity and uncertainty are not included in their formal approach, which any attempt to address hidden quality costs should include. Our methodology begins by observing the position each business occupies in Crosby’s Quality Management Maturity Grid. Obtaining the stage index on the basis of the experts’ opinions permits the valuation of the company’s membership for each of the stages of Crosby’s Maturity Grid. The application of Crosby’s corrector coefficient to an adequate weighting of the stage index makes it possible to obtain the fuzzy number quality cost. The measures obtained and their short-term predictions enable us to know the situation at all times and act accordingly, establishing precise corrective plans that will correct tendencies and make continuous improvement possible

Ordering based decision making: a survey

Decision making is the crucial step in many real applications such as organization management, financial planning, products evaluation and recommendation. Rational decision making is to select an alternative from a set of different ones which has the best utility (i.e., maximally satisfies given criteria, objectives, or preferences). In many cases, decision making is to order alternatives and select one or a few among the top of the ranking. Orderings provide a natural and effective way for representing indeterminate situations which are pervasive in commonsense reasoning. Ordering based decision making is then to find the suitable method for evaluating candidates or ranking alternatives based on provided ordinal information and criteria, and this in many cases is to rank alternatives based on qualitative ordering information. In this paper, we discuss the importance and research aspects of ordering based decision making, and review the existing ordering based decision making theories and methods along with some future research directions

Informational Paradigm, management of uncertainty and theoretical formalisms in the clustering framework: A review

Fifty years have gone by since the publication of the first paper on clustering based on fuzzy sets theory. In 1965, L.A. Zadeh had published “Fuzzy Sets” [335]. After only one year, the first effects of this seminal paper began to emerge, with the pioneering paper on clustering by Bellman, Kalaba, Zadeh [33], in which they proposed a prototypal of clustering algorithm based on the fuzzy sets theory

Uncertainty in life cycle costing for long-range infrastructure. Part I: leveling the playing field to address uncertainties

Purpose Life cycle costing (LCC) is a state-of-the-art method to analyze investment decisions in infrastructure projects. However, uncertainties inherent in long-term planning question the credibility of LCC results. Previous research has not systematically linked sources and methods to address this uncertainty. Part I of this series develops a framework to collect and categorize different sources of uncertainty and addressing methods. This systematization is a prerequisite to further analyze the suitability of methods and levels the playing field for part II. Methods Past reviews have dealt with selected issues of uncertainty in LCC. However, none has systematically collected uncertainties and linked methods to address them. No comprehensive categorization has been published to date. Part I addresses these two research gaps by conducting a systematic literature review. In a rigorous four-step approach, we first scrutinized major databases. Second, we performed a practical and methodological screening to identify in total 115 relevant publications, mostly case studies. Third, we applied content analysis using MAXQDA. Fourth, we illustrated results and concluded upon the research gaps. Results and discussion We identified 33 sources of uncertainty and 24 addressing methods. Sources of uncertainties were categorized according to (i) its origin, i.e., parameter, model, and scenario uncertainty and (ii) the nature of uncertainty, i.e., aleatoric or epistemic uncertainty. The methods to address uncertainties were classified into deterministic, probabilistic, possibilistic, and other methods. With regard to sources of uncertainties, lack of data and data quality was analyzed most often. Most uncertainties having been discussed were located in the use stage. With regard to methods, sensitivity analyses were applied most widely, while more complex methods such as Bayesian models were used less frequently. Data availability and the individual expertise of LCC practitioner foremost influence the selection of methods. Conclusions This article complements existing research by providing a thorough systematization of uncertainties in LCC. However, an unambiguous categorization of uncertainties is difficult and overlapping occurs. Such a systemizing approach is nevertheless necessary for further analyses and levels the playing field for readers not yet familiar with the topic. Part I concludes the following: First, an investigation about which methods are best suited to address a certain type of uncertainty is still outstanding. Second, an analysis of types of uncertainty that have been insufficiently addressed in previous LCC cases is still missing. Part II will focus on these research gaps