Skip to main content
SpringerLink
Log in

Fuzzy Inference Approach to Uncertainty in Budget Preparation and Execution

  • Conference paper
  • First Online:
Decision Support Systems VI - Addressing Sustainability and Societal Challenges (ICDSST 2016)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 250))

Included in the following conference series:

  • 729 Accesses

Abstract

In recent times, diverse uncertainties in the global economic environment have made it difficult for most countries to meet their financial obligations. For example, according to statistics from European Commission, 24 out of 29 recorded European Economic Area member countries had budget deficits in 2014. Therefore through modelling and simulations, this paper proposes flexible decision support schemes that could be used in managing the uncertainties in budgeting. Rather than entirely relying on estimates of anticipated revenues (which are uncertain and difficult to predict) in government budgeting, the scheme proposes incorporating fuzzy inference systems (which is able to capture both the present and future uncertainty) in predicting the anticipated revenues and consequently, in proposing government expenditures. The accuracy of fuzzy rule base helps in mitigating adverse effects of uncertainties in budgeting. We illustrated the proposed scheme with a case study which could easily be adapted and implemented in any budgeting scenarios.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. OECD, Government deficit / surplus as a percentage of GDP 2014/1

    Google Scholar 

  2. Eurostat, General government deficit (–) and surplus (+) - annual data, Eurostat, Editor. European Commission Belgium (2015)

    Google Scholar 

  3. Faucon, B., Kent, S., Said, S.: Oil-Price Slump Strains Budgets of Some OPEC Members. The Wall Street Journal New York, U.S. (2014)

    Google Scholar 

  4. Sandbu, M.: Greece debt crisis: Readers’ questions answered. Financial Times. Financial Times, London, UK (2015)

    Google Scholar 

  5. Broughton, N.: Spending choices after 2015; Pre-Budget Briefing, Social market Foundation, UK (2015). http://www.smf.co.uk/wp-content/uploads/2015/03/Social-Market-FoundationSMF-Pre-Budget-Briefing-Spending-Choices-After-2015.pdf

  6. Kim, J., et al.: Factful: Engaging taxpayers in the public discussion of a government budget. In: Proceedings of the CHI (2015)

    Google Scholar 

  7. McLaney, E.J., Atrill, P.: Accounting: an introduction. Jean Morton (2010)

    Google Scholar 

  8. IBP. Why are budgets important. International Budget Partnership (2015). http://internationalbudget.org/getting-started/why-are-budgets-important/

  9. Webb, D.: Sustainable public spending. Key Issues for the New Parliament 2010 (2010). [cited 2015 23rd November 2015] http://www.parliament.uk/documents/commons/lib/research/key_issues/Key-Issues-Sustainable-public-spending.pdf

  10. Todorovic, J.D., Djordjevic, M.: The importance of public expenditure management in modern budget systems. Econ. Organ. 6(2), 14 (2009)

    Google Scholar 

  11. OBR, Forecast evaluation report. Office for Budget Responsibility, London (2012)

    Google Scholar 

  12. Kuchta, D.: Fuzzy capital budgeting. Fuzzy Sets Syst. 111(3), 367–385 (2000)

    Article  Google Scholar 

  13. Karanovic, G., Gjosevska, B.: Application of fuzzy logic in determining cost of capital for the capital budgeting process. Procedia Econ. Finan. 3, 78–83 (2012)

    Article  Google Scholar 

  14. Council, C.: Budget Preparation (2013)

    Google Scholar 

  15. Zadeh, L.A.: Fuzzy sets. Inf. Control 8(3), 338–353 (1965)

    Article  Google Scholar 

  16. Zadeh, L.A.: The concept of a linguistic variable and its application to approximate reasoning—I. Inf. Sci. 8(3), 199–249 (1975)

    Article  Google Scholar 

  17. Dweiri, F., Kablan, M.: Using fuzzy decision making for the evaluation of the project management internal efficiency. Decis. Support Syst. 42(2), 712–726 (2006)

    Article  Google Scholar 

  18. Bojadziev, G., Bojadziev, M.: Fuzzy Logic for Business, Finance, and Management. World Scientific Publishing Co., Inc., Singapore (2007)

    Google Scholar 

  19. Sharma, R.K., Kumar, D., Kumar, P.: FM – a pragmatic tool to model, analyse and predict complex behaviour of industrial systems. Eng. Comput. 24(4), 319–346 (2007)

    Article  Google Scholar 

  20. Oderanti, F.O., De Wilde, P.: Dynamics of business games with management of fuzzy rules for decision making. Int. J. Prod. Econ. 128(1), 96–109 (2010)

    Article  Google Scholar 

  21. Oderanti, F.O., Li, F., De Wilde, P.: Application of strategic fuzzy games to wage increase negotiation and decision problems. Expert Syst. Appl. 39(12), 11103–11114 (2012)

    Article  Google Scholar 

  22. Barnes, R.: The Importance of Inflation and GDP, in Investopedia. Investopedia, USA (2016)

    Google Scholar 

  23. Kilian, L., Hicks, B.: Did Unexpectedly Strong Economic Growth Cause the Oil Price Shock of 2003–2008? J. Forecast. 32(5), 385–394 (2013)

    Article  Google Scholar 

  24. Daly, M.C., et al.: A search and matching approach to labor markets: did the natural rate of unemployment rise? J. Econ. Perspect. 26(3), 3–26 (2012)

    Article  Google Scholar 

  25. Oderanti, F.O.: Fuzzy inference game approach to uncertainty in business decisions and market competitions. SpringerPlus 2(1), 1–16 (2013)

    Article  Google Scholar 

  26. Bucks, B.K., et al.: Changes in US family finances from 2004 to 2007: evidence from the survey of consumer finances. Fed. Res. Bull. A1, 95 (2009)

    Google Scholar 

  27. Cologni, A., Manera, M.: Oil prices, inflation and interest rates in a structural cointegrated VAR model for the G-7 countries. Energy Econ. 30(3), 856–888 (2008)

    Article  Google Scholar 

  28. Wieland, V.: Monetary policy and uncertainty about the natural unemployment rate (2002)

    Google Scholar 

  29. Subhaashree, S.: Application of Fuzzy Logic to Unemployment Problem. Masters Dissertation, Guide: Dr. WB Vasantha Kandasamy, Department of Mathematics, Indian Institute of Technology (2001)

    Google Scholar 

  30. Reinhart, C.M., Rogoff, K.S.: Growth in a time of debt (digest summary). Am. Econ. Rev. 100(2), 573–578 (2010)

    Article  Google Scholar 

  31. Piana, V.: Tax Revenue (2003), [cited 2015 27th November, 2015]. http://www.economicswebinstitute.org/glossary/taxrev.htm

  32. Pettinger, T.: Tax Revenue Sources in UK (2014) [cited 2015 27th November, 2015]

    Google Scholar 

  33. Bloor, K.: Radicaliism and reality in the national health service: fifty years and more. In: Bloor, K. (ed.) Center for Health Economics, the University of York, UK: York, UK (1998)

    Google Scholar 

  34. Crawford, R., Stoye, G.: The outlook for public spending on the National Health Service. Lancet 385(9974), 1155–1156 (2015)

    Article  Google Scholar 

  35. Griffin, M.: Cuts in public health funding will hit areas of greater need hardest. Nurs. Stan. 29(51), 11 (2015)

    Article  Google Scholar 

  36. Appleby, J.: How much should we spend on health care? Surgeon 13(3), 121–126 (2015)

    Article  Google Scholar 

  37. Chantrill, C.: Total Public Spending (2015), [cited 2015 5th November 2015]. http://www.ukpublicspending.co.uk/total_spending_2008UKbn

  38. Trading Economics. United Kingdom Unemployment Rate 1971–2015 (2015), [cited 2015 5th November, 2015]. http://www.tradingeconomics.com/united-kingdom/unemployment-rate

  39. DWP. Official Statistics Benefit expenditure and caseload tables 2015 (2015), [cited 2015 5th December 2015]. https://www.gov.uk/government/statistics/benefit-expenditure-and-caseload-tables-2015

  40. Lipsey, R.G., Steiner, P.O., Purvis, D.D.: Economics, 8th edn. Harper and Row Publishers, New York (1987)

    Google Scholar 

  41. Nickell, S.: Unemployment and labor market rigidities: Europe versus North America. J. Econ. Perspect. 11, 55–74 (1997)

    Article  Google Scholar 

  42. Scarpetta, S.: Assessing the role of labour market policies and institutional settings on unemployment: a cross-country study. OECD Econ. Stud. 26(1), 43–98 (1996)

    Google Scholar 

  43. BBC. Economy tracker: Unemployment. News Business (2015) [cited 2015 30th November, 2015]

    Google Scholar 

  44. Sarakhsi, M.K., Ghomi, S.F., Karimi, B.: A new hybrid algorithm of scatter search and Nelder-Mead algorithms to optimize joint economic lot sizing problem. J. Comput. Appl. Math. 292, 387–401 (2016)

    Article  Google Scholar 

  45. Ostro, Z.K.: In the debt we trust: the unconstitutionality of defaulting on american financial obligations, and the political implications of their perpetual validity. Harv. J. Legis. 51, 241 (2014)

    Google Scholar 

  46. Hamnett, C.: Shrinking the welfare state: the structure, geography and impact of British government benefit cuts. Trans. Inst. Br. Geogr. 39(4), 490–503 (2014)

    Article  Google Scholar 

  47. O’Hara, M.: Austerity Bites: A Journey to the Sharp End of Cuts in the UK. Policy Press (2015)

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Plymouth Graduate School of Management, University of Plymouth, Drake Circus, Plymouth, PL4 8AA, UK

    Festus Oluseyi Oderanti

Authors
  1. Festus Oluseyi Oderanti
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Festus Oluseyi Oderanti .

Editor information

Editors and Affiliations

  1. Graduate School of Management, University of Plymouth, Plymouth, Devon, United Kingdom

    Shaofeng Liu

  2. Faculty of Organizational Science, University of Belgrade, Belgrade, Serbia

    Boris Delibašić

  3. Graduate School of Management, University of Plymouth, Plymouth, United Kingdom

    Festus Oderanti

Rights and permissions

Reprints and permissions

Copyright information

© 2016 Springer International Publishing Switzerland

About this paper

Cite this paper

Oderanti, F.O. (2016). Fuzzy Inference Approach to Uncertainty in Budget Preparation and Execution. In: Liu, S., Delibašić, B., Oderanti, F. (eds) Decision Support Systems VI - Addressing Sustainability and Societal Challenges. ICDSST 2016. Lecture Notes in Business Information Processing, vol 250. Springer, Cham. https://doi.org/10.1007/978-3-319-32877-5_5

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-32877-5_5

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-32876-8

  • Online ISBN: 978-3-319-32877-5

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation