A rule-based risk decision-making approach and its application in China's customs inspection decision

Z Hua (), S Li () and Z Tao ()
Additional contact information
Z Hua: University of Science & Technology of China
S Li: University of Science & Technology of China
Z Tao: University of Science & Technology of China

Journal of the Operational Research Society, 2006, vol. 57, issue 11, 1313-1322

Abstract: Abstract This paper addresses a kind of risk decision-making problem existing widely in public administration and business management, which is characterized by (1) occurrence probabilities of states of nature can be estimated by analysing historical observations, but historical observations of different objects are unhomogeneous, (2) the relation between observations and occurrence probabilities of states of nature are affected by some qualitative and quantitative indicators, (3) it is a real-time decision-making problem, that is, there are many decisions for different objects to be made in a limited time, (4) considering decision's execution, impact of resource constrains is an important issue in decision-making process. In this paper, we develop a rule-based approach to address the problem. In the proposed approach, a two-step clustering method is employed to classify objects into categories, and observations in each category can be approximately viewed as homogeneous. For objects in each category, occurrence probabilities of states of nature are estimated by logistic regression, and the decision rule is obtained through solving an optimization model, which is to minimize the total decision risks while satisfying resource constrains. Effect and efficacy of our approach are illustrated through its application to China's customs inspection decision.

Keywords: risk decision-making; logistic regression; cluster analysis; optimization; customs inspection (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1057/palgrave.jors.2602142 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jorsoc:v:57:y:2006:i:11:d:10.1057_palgrave.jors.2602142

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/41274

DOI: 10.1057/palgrave.jors.2602142

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald and Jonathan Crook

More articles in Journal of the Operational Research Society from Palgrave Macmillan, The OR Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().