Which Fuzzy Ranking Method is Best for Maximizing Fuzzy Net Present Value?

Abstract

In this paper, ten fuzzy ranking methods are used to find the importance of the activities with respect to the fuzzy net present value (FNPV) of the project. Each method gives a rank for each activity’s cash flow. If these ranks are used as priorities for scheduling activities, thus each method will give different FNPV. In literature, there is a lack of integrated procedure to calculate FNPV in practice, for instance for large projects and when direct cost is given in crisp value. Thus, this paper has twofold objectives. The first objective is to develop an algorithm to maximize FNPV of the project using cash flow weight technique. The second objective is to discover which fuzzy ranking method is best for maximizing FNPV. In the formulation of the algorithm, two scenarios of neglecting and considering inflation rate are adopted in dealing with FNPV. The procedure is applied to an example to show how the algorithm performs. Three case studies are adopted to generalize the results. The main contribution of the paper is that Chu and Tsao (Comput Math Appl 43:111–117, 2002) method is the best method for maximizing FNPV for the adopted scenarios and then Thorani et al. (Int J Contemp Math Sci 7(12):555–573, 2012). The worst methods are Chen and Chen (Appl Intell 26:1–11, 2007, Expert Syst Appl 36:6833–6842, 2009) in case of neglecting and considering inflation, respectively. These methods are consistently the worst depending on a global sensitivity analysis. Among the main findings of the research is extracting an equation for calculating cash flow for large projects.