Free Access
Volume 15, Number 2, 2001
Page(s) 49 - 68
DOI: 10.1051/ejess:2001115

European Journal of Economic and Social Systems 15 N° 2 (2001) 49-68

Discounted cash-flows analysis: An interactive fuzzy arithmetic approach

Cédric Lesage

Centre de Recherche Rennais en Économie et en Gestion (UMR CNRS C6585), 11 rue Jean Macé, CS 70803, 35008 Rennes Cedex 7, France. E-mail:

Many models used in management and economics are based on an arithmetic basis. Moreover, the imperfection of generally available information in these disciplines has led to numerous decision support systems based on fuzzy arithmetic. However, their practical use did not have success expected, because their output were generally too imperfect to help a manager with relevant information. This paper outlines a computational method for decreasing the imperfection of the output of fuzzy arithmetic models. We suggest an approach aiming at integrating into the arithmetic models fuzzy information still not taken into account: the vague knowledge of the interaction potentially existing between the two variables of an arithmetic operation (addition, subtraction, division or product). Thanks to the modelling of three standard relations, we propose a solution towards an interactive fuzzy arithmetic, which reduces the imperfection of the output to help the decision maker. We apply this approach to the choice of investment by the criterion of the Net Present Value resulting from a Discounted Cash-Flows Analysis.

Key words: Fuzzy logic, fuzzy arithmetic, interactivity, discounted cash flows

© EDP Sciences 2001