tailieunhanh - Neuro-fuzzy modeling in bankruptcy prediction

This paper investigates an alternative modeling of the system (firm), combining neural networks and fuzzy controllers, . using neuro-fuzzy models. Classical modeling is based on mathematical models that describe the behavior of the firm under consideration. The main idea of fuzzy control, on the other hand, is to build a model of a human control expert who is capable of controlling the process without thinking in a mathematical model. | Yugoslav Journal of Operations Research 13 (2003), Number 2, 165-174 NEURO-FUZZY MODELING IN BANKRUPTCY PREDICTION* D. VLACHOS Department of Mechanical Engineering Aristotle University of Thessaloniki, Thessaloniki, Greece Y. A. TOLIAS Telecommunications Laboratory Department of Electrical and Computer Engineering Aristotle University of Thessaloniki, Thessaloniki, Greece Communicated by Byron Papathanassiou Abstract: For the past 30 years the problem of bankruptcy prediction had been thoroughly studied. From the paper of Altman in 1968 to the recent papers in the '90s, the progress of prediction accuracy was not satisfactory. This paper investigates an alternative modeling of the system (firm), combining neural networks and fuzzy controllers, . using neuro-fuzzy models. Classical modeling is based on mathematical models that describe the behavior of the firm under consideration. The main idea of fuzzy control, on the other hand, is to build a model of a human control expert who is capable of controlling the process without thinking in a mathematical model. This control expert specifies his control action in the form of linguistic rules. These control rules are translated into the framework of fuzzy set theory providing a calculus, which can stimulate the behavior of the control expert and enhance its performance. The accuracy of the model is studied using datasets from previous research papers. Keywords: Neuro-fuzzy, bankruptcy. 1. INTRODUCTION The ability to predict firm bankruptcies has been extensively studied in the accounting literature. Creditors, auditors, stockholders and senior managers all have a vested interest in utilizing and developing a methodology or a model that will allow them to monitor the financial performance of a firm. There exist extensive studies in this area using statistical approaches and Artificial Intelligence, most of which use * Presented at 6th Balkan Conference on Operational Research 166 D. Vlachos, . Tolias / .