Kishk, M and Al-Hajj, A (2000) A fuzzy model and algorithm to handle subjectivity in life cycle costing based decision-making. Journal of Financial Management of Property and Construction, 5(1-2), pp. 93-104. ISSN 1366-4387
Abstract
A life cycle costing (LCC) algorithm that can effectively deal with judgmental assessments of input parameters is proposed. This algorithm is based on the fuzzy set theory and interval mathematics. The development of the algorithm is motivated by the need to handle in a systematic and a more objective way the imprecision in these subjective assessments. Three major issues were considered in the development of the algorithm. First, an appropriate mathematical framework for representing subjective imprecision was identified. Then, the original LCC closed-form equation was reformulated so that uncertainties in all input parameters can be modelled in an effective and convenient manner. Finally, the formulated model was implemented in the form of an efficient computational algorithm. The algorithm handles a number of alternatives with imprecise input data and ranks them automatically. The solution of a selected example problem is included to clarify the theory of the model.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | fuzzy set theory, interval analysis, life cycle costing, risk assessment |
| Index terms: | decision-making, life cycle, costing, risk assessment, fuzzy set theory, subjectivity |
| Subjects: | accounting and finance, financial risk, decision analysis, human factors and perception, value management, decision-making and optimization |
| Topics: | Cost Management, Risk Management, Project Management, Research Practice |
| Descriptive scope: | 3 PCT |
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