Fuzzy Capital Budgeting

Capital budgetingCapital budgeting involves choosing independent investment options with the goal of maximizing profits within a specified budget constraint. Real-life uncertainties are associated with parameters such as initial investment cost, annual cash flows, interest rates, and budget limits. These parameters can be characterized as ranges, and their affiliation with fuzzy sets can be determined, considering both memberships and non-memberships. This chapter presents a modeling approach to the capital budgeting problem, treating it as a 0–1 linear programmingLinear programming problem through ordinary fuzzy setOrdinary fuzzy set theory and non-linear programmingNon-linear programming problem through intuitionistic fuzzy setIntuitionistic fuzzy set theory. The models’ validity is illustrated using numerical examples.