TY - JOUR
T1 - Intuitionistic fuzzy risk adjusted discount rate and certainty equivalent methods for risky projects
AU - Haktanır, Elif
AU - Kahraman, Cengiz
N1 - Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2023/3
Y1 - 2023/3
N2 - Risk adjusted interest rate (RADR) method and certainty equivalent (CE) method are the two popular methods used under risky conditions in the investment analysis. However, it should not be forgotten that there may be a vagueness in the estimation of risk factors. In this study, novel RADR and CE methods are extended for use under uncertainty by using single valued intuitionistic fuzzy (IF) sets. All investment parameters are used as IF parameters. High speed rail and nuclear power plant investments given in the study were analyzed with IF-RADR and IF-CE methods. This study constitutes an important resource on how to analyze investments under risk with other fuzzy sets extensions. Another important aspect of the study is that the paper determines IF numbers consciously instead of assigning random fuzzy numbers and letting them be applied, e.g., IF-RADR and IF-CE values are determined to express the same vagueness and impreciseness. The study also includes an IF sensitivity analysis for a nuclear power plant investment problem. It is concluded with discussions and future research suggestions.
AB - Risk adjusted interest rate (RADR) method and certainty equivalent (CE) method are the two popular methods used under risky conditions in the investment analysis. However, it should not be forgotten that there may be a vagueness in the estimation of risk factors. In this study, novel RADR and CE methods are extended for use under uncertainty by using single valued intuitionistic fuzzy (IF) sets. All investment parameters are used as IF parameters. High speed rail and nuclear power plant investments given in the study were analyzed with IF-RADR and IF-CE methods. This study constitutes an important resource on how to analyze investments under risk with other fuzzy sets extensions. Another important aspect of the study is that the paper determines IF numbers consciously instead of assigning random fuzzy numbers and letting them be applied, e.g., IF-RADR and IF-CE values are determined to express the same vagueness and impreciseness. The study also includes an IF sensitivity analysis for a nuclear power plant investment problem. It is concluded with discussions and future research suggestions.
KW - Certainty equivalent
KW - Intuitionistic fuzzy sets
KW - Risk adjusted discount rate
UR - http://www.scopus.com/inward/record.url?scp=85145769519&partnerID=8YFLogxK
U2 - 10.1016/j.ijpe.2022.108757
DO - 10.1016/j.ijpe.2022.108757
M3 - Article
AN - SCOPUS:85145769519
SN - 0925-5273
VL - 257
JO - International Journal of Production Economics
JF - International Journal of Production Economics
M1 - 108757
ER -