Combination of the Data Envelopment Analysis and the Discriminant Analysis for Evaluating Bankrupt Business in a Fuzzy Environment

Abstract

ABSTRACT This paper presents a combination of the data envelopment analysis (DEA) and discriminant analysis (DA) to evaluate the bankrupt business in a fuzzy environment. The DEA is a non-parametric method that can be used for various assessments. The DA is a statistical method that can predict an appropriate group for new observations. The combination of DEA and DA methods creates a powerful method that includes the advantages of both methods. According to the special features of this method (e.g. high resolution and assessment accuracy), it can be used for a bankruptcy assessment of organisations. In normal conditions, accurate measurement of data is very difficult, which is why considering the uncertainty conditions in models can make them more applied. Using a fuzzy condition in models can help this issue. Finally, the results are illustrated and discussed.