A study on the quality of credit granting in leasing: fuzzy set theory approach

Abstract

 The main purpose of this paper is to apply fuzzy set theory to the leasing credit granting management. A new leasing credit granting model is proposed to improve the quality of leasing credit granting decision-making under fuzzy environment. A fuzzy breakeven analysis based on the cost-volume-profit (CVP) analysis by using the concepts of triangular fuzzy numbers and linguistic variables is discussed. A leasing client's granting quality determination model is constructed by combining fuzzy breakeven analysis with Markov chain. An algorithm of the proposed model is developed to see if there is any improvement in credit quality of client after leasing by a decision rule defined in this paper. The strategic decisions of leasing industry are also discussed in this study by using fuzzy breakeven analysis.