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A Fuzzy Approach for Projects Evaluation and Selection; an Iranian Auto Manufacturer Case Study

Author

Listed:
  • Iraj Noravesh

    (Associate Professor of Accounting Department Faculty of Management University of Tehran; Iran)

  • Mohammad Delasay Sorkhab

    (Corresponding author; MSc in Industrial Engineering Faculty of Engineering University of Tehran; Iran)

  • Faegh Salehi

    (MSc in Accounting Faculty of Management University of Tehran; Iran)

Abstract

Evaluating and selecting alternatives investment projects needs considering all relevant and important aspects. In traditional methods, the focus is just on tangible monetary criteria. Also in the traditional methods, either all the information's about factors must be known precisely or sufficient objective data must be available for applying probability theory. In this paper, a combinative approach is employed to integrate all monetary factors, subjective non monetary factors and also objective non monetary factors in decision making process of project evaluation and selection. In the proposed approach to deal with uncertainty in monetary criteria and also vagueness of human thought in subjective non monetary criteria, fuzzy cash flow analysis and multi criteria decision making method are applied, respectively. As a case study, this methodology has been applied for evaluation of an Iranian auto manufacturer’s projects. The results depict that the methodology can vastly help decision makers to evaluate projects under vague and uncertain circumstances considering all important criteria.

Suggested Citation

  • Iraj Noravesh & Mohammad Delasay Sorkhab & Faegh Salehi, 2006. "A Fuzzy Approach for Projects Evaluation and Selection; an Iranian Auto Manufacturer Case Study," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 11(1), pages 171-185, winter.
    • Handle: RePEc:eut:journl:v:11:y:2006:i:1:p:171
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    References listed on IDEAS

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    1. Beskese, Ahmet & Kahraman, Cengiz & Irani, Zahir, 2004. "Quantification of flexibility in advanced manufacturing systems using fuzzy concept," International Journal of Production Economics, Elsevier, vol. 89(1), pages 45-56, May.
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