Application of fuzzy calculations for improving portfolio matrices

This paper considers the limitations and problems of classic portfolio analysis approach and resolves these problems by using fuzzy set theory, and develops and implements a strategic decision making model using fuzzy triangular numbers.

Abstract

In this paper, we draw upon portfolio analysis to develop and implement a strategic decision making model. We consider the limitations and problems of classic portfolio analysis approach and resolve these problems by using fuzzy set theory. In the proposed method, both internal and external factors are evaluated in linguistic terms and in terms of fuzzy triangular numbers. The fuzzy numbers are fed into an industry attractiveness-business analysis matrix. The novelty of the proposed approach comes from the fact that fuzzy numbers are processed without using conventional methods, allowing for strategies to be ranked.