A Set Covering-Based Diagnostic Expert System to Economic and Financial Applications

Abstract

This paper considers the identification of problems which generate anomalies at firms through the observed symptoms on the basis of fuzzy relations and Zadeh's compositional rule of inference. A procedure for determining the fuzzy cause vector of an economic and financial diagnosis problem is proposed, which consists of the design of fuzzy relational matrix and the resolution of a system of fuzzy relational equations. An efficient algorithm for solving fuzzy relational equations in terms of the associated set covering problem is introduced. It utilizes a back-tracking method to generate each minimal covering, where no duplicate or non-minimal coverings exist. A numerical example of firms' insolvency causes diagnosis is also included.