The OWA distance operator and its application in business failure

HERNÁN VIGIER; HERNÁN VIGIER; VALERIA SCHERGER; ANTONIO TERCEÑO; ANTONIO TERCEÑO; VALERIA SCHERGER

KYBERNETES

EMERALD GROUP PUBLISHING LIMITED

Año: 2017 vol. 46 p. 114 - 130

0368-492X

Purpose: The purpose of this paper is to develop a goodness index based on Hamming distance and OWA distance, which is useful to make decisions. These alternative measures enrich the results of diagnostic fuzzy models and facilitate theexpert´s task in decision making. An application to a set of firms to verify the results is also presented.Design/methodology/approach: The paper follows the basis of OWA operators to design a methodology to reduce the map of causes of business failure into monitoring key areas.Findings: The present paper introduces two alternative measures to test the proposal of grouping. In the empirical application the superiority of the minimum T- norm over other decision rules is verified. The OWAD goodness index predicts a better adjustment over the index built using OWA and Hamming distance measures.Practical implications: A useful mechanism to reduce the map of causes or diseases detected in key areas is added through this analysis. At the same time, these key areas can be disaggregated once some alert indicator is identified; this allows knowing the causes that require special attention. This application of OWA can encourage the development of suitable computer systems for monitoring the firm?s problems, alert failures and ease decision-making.Originality/value: A comparison of grouping causes into key areas through a goodness index based on Hamming distance and OWA distance is proposed. These contributions enrich the Vigier and Terceño (2008) model and could be applied to any model of fuzzy diagnosis to test the results.