Application of Fuzzy Calculation in Portfolio Matrices for Improving Formulation of Portfolio Strategies

Document Type : Research Paper

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Abstract

One of the most important instruments used in portfolio analysis is the business portfolio analysis matrix and the industry attractiveness – business strength matrix is the variation of the business portfolio analysis matrix that we have selected for the purposes of this research. In this paper, we consider the limitations and problems of the classic portfolio analysis approach and resolve these problems by using fuzzy set theory. In the proposed methodology, both internal and external factors are evaluated in linguistic terms and in terms of fuzzy triangular numbers with fuzzy screening approach. Triangular fuzzy numbers were displayed in industry attractiveness – business strength matrix and specified a region on the matrix for each business. Thus the presented methodology in this article, according to the percentage of the rectangle in each zone, extracts and prioritizes the more significant strategies for businesses. Finally, an application in one of active Companies in Sugar industry is presented to illustrate the proposed methodology.

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