Fuzzy logic and evaluation of advanced technologies

The paper's aim is to provide a tool for decision makers to make more informed decisions regarding their investment in advanced technologies.

Selection of an advanced technology for adoption requires evaluation of several competing alternatives. The difficulty in the evaluation process arises when the ranking of the alternatives is not possible from the result of the financial analysis alone. The purpose of this study is to overcome such difficulty by considering other factors that allows distinction among alternatives with similar economic evaluation results. This is accomplished by identifying the risks or undesirable consequences of technology implementation and including them in the evaluation process. These are costs that are not measurable for inclusion in the financial analysis but could have major impact on the final selection. Owing to uncertainties involved with adoption of a new technology, the involvement of human expertise and judgment seems to be essential in the evaluation process. To accomplish this a process is proposed where decision maker's perceptions on the performance of technology alternatives along with the importance of the relevant risks are solicited in linguistic terms. Fuzzy numbers are then used to represent these linguistic perceptions. Fuzzy arithmetic operators are applied to calculate an aggregate fuzzy score for each alternative. These fuzzy scores are then converted to crisp scores to allow the ranking and selection of the best alternative.

Addition of subjective perceptions to the purely quantitative approach provides a more realistic evaluation process.

The proposed procedure can help practitioners with their technology adoption decisions.

The value of the paper is the inclusion of the decision maker's judgment in the evaluation process by use of fuzzy logic.