Managing uncertainty in long life cycle investments: unifying investment planning, management, and post-audit with a fuzzy DSS

Jaana Sandström, Kalevi Kyläheiko and Mikael Collan

International Journal of Business Innovation and Research, 2016, vol. 11, issue 1, 133-145

Abstract: Capital investments with long life cycles are commonly planned and analysed carefully before the investment decision is taken. However, it is often the case after the investment decision, during the operational management of the investment and throughout the economic life of investments that the monitoring of the overall profitability is more or less random. Post-audits are commonly used, ex-post to find out how the investment profitability actually played out. Planning, operational management, and post-audits are separate processes and there are commonly discontinuities between them that create remarkable inefficiencies both in management and corporate learning for future investments. This article considers unifying the separate processes of planning, management, and post-audit into one dynamic investment profitability management process. Use of information systems as a tool to achieve the task is discussed and an example of a fuzzy number-based dynamic profitability analysis system is used for illustration.

Keywords: operational management; fuzzy numbers; management information systems; MIS; capital budgeting; uncertainty management; capital investments; long life cycle investments; investment planning; investment management; post-audits; fuzzy logic; fuzzy DSS; decision support systems; investment profitability. (search for similar items in EconPapers)
Date: 2016
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