Fuzzy logic and intelligent agents: towards the next step of capital budgeting decision support

• Published in: Industrial management + data systems Vol. 103; no. 6; pp. 410 - 422
• Main Authors: Collan, Mikael, Liu, Shuhua
• Format: Journal Article
• Language: English
• Published: Wembley MCB UP Ltd 01-08-2003; Emerald Group Publishing Limited
• Subjects: Access to information; Capital budgeting; Decision making; Decision support systems; Discounted cash flow; Economic life; Fuzzy logic; Intelligent agents; Investment advisors; Investments; Quantitative analysis; Real time; Studies; User interface; Fuzzy logic; Intelligent agents; Capital budgeting
• ISSN: 0263-5577; 1758-5783; 0263-5577
• DOI: 10.1108/02635570310479981

The economic life of large investments necessitates constant dynamic managerial actions. To be able to act in an optimal way in the dynamic management of large investments managers need to have constant access to information about the real time situation of the investment, as well as access to up-to-date information about changes in the business environment. Looks at how emerging soft computing technologies will help to provide a better support in such a context and then to frame a support system that will make an integrated application of the technologies. Introduces traditional and advanced methods for capital budgeting and investment decision making, then presents a process view of the real option framework based investment management, and develops a holistic framework for an agent-facilitated capital budgeting system using a fuzzy real option approach. Discusses how intelligent agents can be applied to collect decision information, and to facilitate the integration of foresight information into capital budgeting process, and how the agents can be constructed. Finally, elaborates on the managerial implications of the proposed decision support technology.