Paper Title :A Novel Application of Vague Set Theory in Company’s Financial Forecasting
Author :Kuo-Sui Lin, Ming-Chang Ke, Jui-Ching Pan
Article Citation :Kuo-Sui Lin ,Ming-Chang Ke ,Jui-Ching Pan ,
(2018 ) " A Novel Application of Vague Set Theory in Company’s Financial Forecasting " ,
International Journal of Management and Applied Science (IJMAS) ,
pp. 102-107,
Volume-4,Issue-9
Abstract : Financial forecasting helps to develop a pro forma financial statement for the company’s strategic goal and
objectives. A common method for developing a pro forma financial statement is the percentage of sales method. The
percentage of sales method begins with a forecast for the growth rate of company’s sales. As a best practice, a financial
forecasting panel composed of financial expert and/or senior management is called on to derive products’ sales growth rate
and further to forecast compound sales growth rate of company’s product portfolio based on their precious knowledge or
experience of the industry. Thus the main purpose of this study was to propose a vague set based financial forecasting
method to the financial forecasting panel to forecast sales growth rate for company’s product portfolio under vague and
uncertain environment. In this study, by using the author’s polling method and score function, a new vague set based
financial forecasting method is proposed to the financial forecasting panel for forecasting company’s sales growth rate
employing a vague set based forecasting value sheet. The forecasted values allocated to the products in the forecasting grade
sheet can be regarded as a set of vague values, where each element in the universe of discourse belonging to a vague set is
represented by a vague value in [0, 1]. A numerical case study was also conducted to show the proposed method is useful in:
(1) providing the financial forecasting panel a collective evaluation method for conducting company’s financial forecasting,
(2) deriving company’s individual product sales growth rate, and (3) deriving compound sales growth rate of company’s
product portfolio.
Keywords - Financial Forecasting, Product Portfolio, Sales Growth Rate, Vague Set Theory
Type : Research paper
Published : Volume-4,Issue-9
DOIONLINE NO - IJMAS-IRAJ-DOIONLINE-13741
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Published on 2018-12-12 |
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