Skip to main content
SpringerLink
Log in

Optimization with Fuzzy Present Worth Analysis and Applications

  • Chapter
Fuzzy Engineering Economics with Applications

Part of the book series: Studies in Fuzziness and Soft Computing ((STUDFUZZ,volume 233))

Abstract

This chapter introduces fuzzy net present value analysis. The present value approach is first analyzed by crisp values. After the basic definitions of fuzzy numbers are given, the concept and applications of fuzzy present value are handled. The other components of this chapter is the fuzzy and probabilistic approach to the present value, the fuzzy net present value maximization as an objective in project selection problems, applications to the valuation of projects with future options, interpretation of fuzzy present value and fuzzy net present value, fuzzy net present value as objective in optimization problems from the industry, fuzzy net present value as an objective in spatial games, and fuzzy classification based on net present value.

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 129.00
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover 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

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Balasubramanian, P., Kulatilaka, N., Storck, J.: Managing information technology investments using a real-options approach. The Journal of Strategic Information Systems 9(1), 39–62 (2000)

    Article  Google Scholar 

  • Bogataj, M., Bogataj, L.: Supply chain coordination in spatial games. International Journal of Production Economics 71, 277–285 (2001)

    Article  Google Scholar 

  • Bogataj, M., Usenik, J.: Fuzzy approach to the spatial games in the total market area. International Journal of Production Economics 93(94), 493–503 (2005)

    Article  Google Scholar 

  • Buckley, J.J.: The Fuzzy Mathematics of Finance. Fuzzy Sets and Systems 21, 257–273 (1987)

    Article  MATH  MathSciNet  Google Scholar 

  • Buckley, J.J.: Solving Fuzzy Equations in Economics and Finance. Fuzzy Sets and Systems 48, 289–296 (1992)

    Article  MATH  MathSciNet  Google Scholar 

  • Carlsson, C., Fullér, R.: A Fuzzy Approach to Real Options Valuation. Fuzzy Sets and Systems 139, 297–312 (2003)

    Article  MATH  MathSciNet  Google Scholar 

  • Campos, L.M., Gonzáles, A.: A subjective approach for ranking fuzzy numbers. Fuzzy Sets and Systems 29, 145–153 (1989)

    Article  MATH  MathSciNet  Google Scholar 

  • Chan, F.T.S., Chan, M.H., Tang, N.K.H.: Evaluation methodologies for technology selection. Journal of Materials Processing Technology 107, 330–337 (2000)

    Article  Google Scholar 

  • Chang, W.: Ranking of fuzzy utilities with triangular membership function. In: Proc. Int. Conf. of Policy Anal. and Inf. Systems, pp. 263–272 (1981)

    Google Scholar 

  • Choobineh, F., Behrens, A.: Use of interval and possibility distributions in economic analysis. Journal of Operations Research Society 43(9), 907–918 (1992)

    MATH  Google Scholar 

  • Chiu, C.Y., Park, C.S.: Fuzzy Cash Flow Analysis Using Present Worth Criterion. Eng. Econom. 39(2), 113–138 (1994)

    Article  Google Scholar 

  • Collan, M.: Fuzzy real investment valuation model for giga-investments, and a note on giga-investment lifecycle and valuation. TUCS Technical Report 617, Abo Akademi University, Institute for Advanced Management Systems Research (2004)

    Google Scholar 

  • Debnath, L.: Integral transforms and their application. CRC Press, New York (1995)

    Google Scholar 

  • Dimova, L., Sevastianov, P., Sevastianov, D.: MCDM in a fuzzy setting: Invetsment projects assessment application. International Journal of Production Economics 100, 10–26 (2006)

    Article  Google Scholar 

  • Dubois, D., Prade, H.: Ranking fuzzy numbers in the setting of possibility theory. Information Sciences 30, 183–224 (1983)

    Article  MATH  MathSciNet  Google Scholar 

  • Dompere, K.K.: The theory of social cost and costing for cost-benefit analysis in a fuzzy-decision space. Fuzzy Sets and Systems 76, 1–24 (1995)

    Article  MATH  MathSciNet  Google Scholar 

  • Dubois, D., Prade, H.: Fuzzy Numbers: An overview, analysis of fuzzy information. In: Mathematics and Logic (1), pp. 3–39. CRC Press, Boca Raton (1985)

    Google Scholar 

  • Giffin, W.C.: Transform techniques for probability modeling. Academic Press, New York (1975)

    MATH  Google Scholar 

  • Gutiérrez, I.: Fuzzy Numbers and Net Present Value. Scand. J. Mgmt. 5(2), 149–159 (1989)

    Article  Google Scholar 

  • Greenhut, J.G., Norman, G., Temponi, C.: Toward a fuzzy theory of oligopolistic competition. In: IEEE Procedings of ISUMA-NAFIPS 1995, pp. 286–291 (1995)

    Google Scholar 

  • Haven, E.E.: The Fuzzy Multicrteria Analysis Method: An Application on NPV Ranking. Int. Journal of Intelligent Systems in Accounting, Finance and Management 7, 243–252 (1998)

    Article  Google Scholar 

  • Horngren, T.H., Foster, G., Datar, S.M.: Cost accounting: A Managerial Emphasis. Prentice Hall, Englewood Cliffs (1994)

    Google Scholar 

  • Huang, X.: Chance-constrained programming problems for capital budgeting with NPV as fuzzy parameters. Journal of Computational and Applied Mathematics 198(1), 149–159 (2006)

    Article  Google Scholar 

  • Huang, X.: Optimal project selection with random fuzzy parameters. International Journal of Production Economics 106, 513–522 (2007)

    Article  Google Scholar 

  • Inuiguchi, M., Ichihashi, H.: Relative modalities and their use in possibilistic linear programming. Fuzzy Sets and Systems 35(3), 303–323 (1990)

    Article  MATH  MathSciNet  Google Scholar 

  • Jain, R.: Decision-making in the presence of fuzzy variables. IEEE Trans. Syst. Man Cybern. 6, 698–703 (1976)

    Article  MATH  Google Scholar 

  • Kahraman, C.: Fuzzy Versus Probabilistic Benefit/Cost Ratio Analysis for Public Work Projects. Int. J. of Applied Math. and Comp. Sc. 11(3), 705–718 (2001)

    MATH  MathSciNet  Google Scholar 

  • Kahraman, C., Ulukan, Z.: Multi-Criteria Capital Budgeting Using FLIP. In: Third International Conference on Computational Intelligence and Multimedia Applications (ICCIMA 1999), pp. 426–431 (1999)

    Google Scholar 

  • Kahraman, C., Ruan, D., Tolga, E.: Capital Budgeting Techniques Using Discounted Fuzzy Versus Probabilistic Cash flows. Information Sciences 142, 57–76 (2002)

    Article  MATH  Google Scholar 

  • Kaufmann, A., Gupta, M.M.: Fuzzy mathematical models in engineering and management science. Elsevier Scinece Publishers BV, Amsterdam (1988)

    MATH  Google Scholar 

  • Kuchta, D.: Fuzzy Capital Budgeting. Fuzzy Sets and Systems 111, 367–385 (2000)

    Article  MATH  Google Scholar 

  • Lesage, C.: Discounted Cash-flows Analysis: An Interactive fuzzy arithmetic approach. European Journal of Economic and Social Systems 15(2), 49–68 (2001)

    Article  MATH  Google Scholar 

  • Kwakernaak, H.K.: Fuzzy random variables-I. Information Sciences 15, 1–29 (1978)

    Article  MATH  MathSciNet  Google Scholar 

  • Kwakernaak, H.K.: Fuzzy random variables-II. Information Sciences 17, 153–1768 (1979)

    Article  MathSciNet  Google Scholar 

  • Liu, B.: Theory and Practice of Uncertain Programming. Phisica-Verlag, Heidelberg (2002)

    MATH  Google Scholar 

  • Liu, L.M., Sahinidis, N.V.: Process planning in a fuzzy environment. European Journal of Operational Research 100, 142–169 (1997)

    Article  MATH  Google Scholar 

  • Rebiasz, B.: Fuzziness and randomness in investment project risk appraisal. Computers and Operations Research 34, 199–210 (2007)

    Article  MATH  Google Scholar 

  • Ross, T.J.: Fuzzy logic with engineering applications. McGraw Hill Inc., New York (1995)

    MATH  Google Scholar 

  • Sheen, J.N.: Fuzzy financial analyses of demand side management alternatives. IEE Proc. Gener. Transm. Distrib. 152(2), 215–226 (2005a)

    Article  Google Scholar 

  • Sáez, C.A., Requena, J.C.: Reconciling sustainability and discounting in Cost-Benefit Analysis: A methodological approach. Ecological Economics 60, 712–725 (2007)

    Article  Google Scholar 

  • Sheen, J.N.: Fuzzy financial profitability analyses of demand side management alternatives from participant perspective. Information Sciences 169, 329–364 (2005b)

    Article  MATH  Google Scholar 

  • Sheen, J.N.: Fuzzy evaluation of cogeneration alternatives in a petrochemical industry. Computers and Mathematics with applications 49, 741–755 (2005c)

    Article  MATH  MathSciNet  Google Scholar 

  • SÅ‚owiÅ„ski, R.: A multicriteria fuzzy linear programming method for water supply system development planning. Fuzzy Sets and Systems 19(3), 217–237 (1986)

    Article  MATH  MathSciNet  Google Scholar 

  • Tanaka, H., Asai, K.: Fuzzy linear programming with fuzzy numbers. Fuzzy Sets and Systems 13, 110 (1984)

    Article  MathSciNet  Google Scholar 

  • Terceño, A., de Andrés, J., Barberà, G.: Using fuzzy set theory to analyse investments and select portfolios of tangible investments in uncertain environments. International Journal of Uncertainty, Fuzziness and Knowledge-Based Systems 3, 263–281 (2003)

    Article  Google Scholar 

  • Tsao, C.-T.: Assessing the Probabilistic Fuzzy Net Present Value for a Capital. Investment Choice Using Fuzzy Arithmetic, J. of Chin. Inst. of Industrial Engineers 22(2), 106–118 (2005)

    Google Scholar 

  • Vranes, S., Stanojevic, M., Stevanovic, V.: Financial decision aid based on heuristics and fuzzy logic. In: Damiani, E., et al. (eds.) Knowledge based Intelligent Information Engineering systems and allied technologies, Proceedings of KES 2003 conference, Crema, Itally, September 16-18, pp. 381–387 (2002)

    Google Scholar 

  • Wong, J.K.W., Li, H., Wang, S.W.: Intelligent building research: a review. Automation in Construction 14, 143–159 (2005)

    Article  Google Scholar 

  • Ward, T.L.: Discounted fuzzy Cash flow Analysis. In: 1985 Fall Industrial Engineering Conference Proceedings, pp. 476–481 (1985)

    Google Scholar 

  • Yager, R.R.: Level sets for membership evaluations of fuzzy subsets. In: Yager, R.R. (ed.) Fuzzy sets and possibility theory: recent developments, pp. 90–97. Pergamon Press, Oxford (1982)

    Google Scholar 

  • Yao, J., Wu, K.: Ranking fuzzy numbers based on decomposition principle and signed distance. Fuzzy Sets and Systems 116, 275–288 (2000)

    Article  MATH  MathSciNet  Google Scholar 

  • Zadeh, L.A.: Fuzzy Sets. Inf. and Control 8, 338–353 (1965)

    Article  MATH  MathSciNet  Google Scholar 

  • Zhou, W., Gong, P.: Economic effects of environmental concerns in forest management: an analysis of the cost of achieving environmental goals. Journal of Forest Economics 10, 97–113 (2004)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Institute of Industrial Engineering and Management, Wroclaw University of Technology, Smoluchowskiego, 25, 50-371, Wroclaw, Poland

    Dorota Kuchta

Authors
  1. Dorota Kuchta
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Cengiz Kahraman

Rights and permissions

Reprints and permissions

Copyright information

© 2008 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Kuchta, D. (2008). Optimization with Fuzzy Present Worth Analysis and Applications. In: Kahraman, C. (eds) Fuzzy Engineering Economics with Applications. Studies in Fuzziness and Soft Computing, vol 233. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-70810-0_3

Download citation

  • DOI: https://doi.org/10.1007/978-3-540-70810-0_3

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-70809-4

  • Online ISBN: 978-3-540-70810-0

  • eBook Packages: EngineeringEngineering (R0)

Publish with us

Policies and ethics

Search

Navigation