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C. Castillo and T. Lorenzana
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T. Lorenzana: Universidad de Almería

Fuzzy Economic Review, 2010, vol. XV, issue 1, 3-20

Abstract: Assessing business scenarios with composite indicators allows the combination of both quantitative and qualitative performance measures (PM). This paper presents a methodology for constructing composite indicators by aggregating multiple PMs to diagnose business performance. Assuming that measures are expressed in heterogeneous units, these must be normalized in scales with a common base in order to aggregate and combine data. This is achieved by modelling the opinions of experts using the linguistic approach of the Fuzzy Sets Theory. In this way we obtain the sub-indicators representing the excellence of each PM, quantified in a common scale. These sub-indicators provide the basis for the construction of a composite indicator whose value is determined by means of a fuzzy-rule-based system. This aggregation procedure avoids compensation among sub-indicators and the possible redundancy of the information they contain.

Keywords: performance measures; aggregation of information; composite indicators; linguistic variables; fuzzy-rule-based systems (search for similar items in EconPapers)
JEL-codes: D21 D81 M10 (search for similar items in EconPapers)
Date: 2010
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