2010 International Conference on E-Business and E-Government

Management Decision-Making Based on Fuzzy

Neural Network

Yuan Yao, Xiaokun Zhou, Peng Dong

Information Science and Technology Institute, Zhengzhou City, Henan Provience, China
gpengdongg@163.com

II MUTI-LAYER PERCEPTRON MODEL

Abstract-In this paper, it proposes fuzzy neural network(NN) system
which is used for management decision-making and composed of
three separate networks. The system's input can be both figures and
vector language. The system's output exceeds the standard neural
network —two-valued logic state. Based on the ambiguity function,
NN's back-propagation algorithm and the monotonic function NN
model the paper proposes the learning algorithm which is suitable
for the fuzzy neural network. The system can well adapt to the
management problems which are complex and ambiguous.
Keywords-component: fuzzy; neural network; management
decision-making
Artificial neural network can simulate human’s brain based
on biological neural network. In general, NN is a fully
interconnected network with the following three basic
elements. The first is the network topology, the second is
characteristics of the nodes, the third is learning algorithm.
Multi-layer perceptron model is also known as the BP
model which is constructed by input layer, output layer and
hidden layer. The Multi-layer perceptron model is shown in
figure 1.

I INTRODUCTION
In usual time, people always use several decision variables
and experience to make decisions. But the diversity and the
complexity of the objective world always make the decision
run to the wrong orient. The reasons for these uncertainties
arising mainly from three aspects. The first one is the
information used for decision-making is not integrate. The
second is the decision-making is not only a function of decision
variables, but also contains subjective factors[1]. The third one
is the process of determine is often blurred. Therefore, Merely
using the quantitative methods of management science to solve
complex manage decision-making problems in complex
environment is quit difficult. Fuzzy sets can not only express
the ambiguity of information but also can express the
uncertainty. And can learn the advantages from natural Figure1. Multi-layer perceptron model
language in settling management issues. So that it is more close
to hunman behavior in management decision-making[2]. in it, x1 , x2 , , xn are n input nodes, h1 , h2 , , hp are p hidden
Neural network(NN) as a tool of artificial intelligence can nodes, y1 , y2 , , ym are m output
help people automatically getting and accumulating nodes. ωij ( i = 1, 2, , m; j = 1, 2, , p ) mean the weight of ith
knowledges especially for managerial decision –making in the node of input layer and the jth node of hidden layer.
semistructured and unstructured problems. At present, neural
vkl ( k = 1, 2, , p; l = 1, 2, , m ) mean the weight of kth node of
networks and fuzzy set theory has been used in expert system
reasoning, neural network learning algorithm design, control hidden layer and the lth node of output layer. The nodes in the
areas and so on. Fuzzy sets can same layer have no relations and the nodes in neighbor layers
connect with weight. The knowledge gained in network
provide users with information vector naturally and the learning exist in these weights. The function of nodes often
NN’s self-adaptive can realize using fuzzy sets to discribe have hard-line function, threshold function and S function.
management problems[3,4]. So the method based on fuzzy Here we use S function which has good performance.
neural network can resolve the management decision-making Back-propagation process is applied generalized Delta rule,
problems suitably. and gradually adjust the weights between nodes and will
reduce the cost function to a certain limit.

978-0-7695-3997-3/10 $26.00 © 2010 IEEE 2454

DOI 10.1109/ICEE.2010.620
 III FUZZY NEURAL NETWORK in it, φ < 0 is radius of π functon, C is the middle point,

Standard NN model ignores the ambiguity of the input i is the Euclidean distance. In X = [ x1 , x2 , , xn ] , x j ∈ R .
vector and doesn’t considere one input vector can produces a x j max and x j min are respectively upper limit and floor limit of
variety of decision-making methods. In this paper, in order to X, so
resolve the problem, fuzzy neural network provides a method
to express membership function using fuzzy input vectors. This
⎧ 1
⎪φm ( x j ) = ( x j max − x j min )
approach would reduce the ambiguity of information and
improve the quality of decision-making and network ⎪ 2
robustness. ⎪
⎨Cm ( x j ) = x j min + φm ( x j ) (3)
⎪
A. Fuzzy Input ⎪φ ( x ) = 1 C ( x ) − x
( )
⎪⎩ l j fk
m j j min

Generally speaking, the informations ( X ′ ) we get from

observation of something is only part of informations ( X ) of ⎧C ( x ) = C ( x ) − 0.5φ ( x )
something. That means the determination Y is the function of ⎪ l j m j l j

⎪ 1
X but X ′ . So if we want to improve the quality of
determination, we should use original informations to train the
⎨φk ( x j ) =
f
(
x j max − Cm ( x j ) ) (4)
⎪ k
NN as many as posible. In order to decrease the difference of ⎪C x = C x + 0.5φ x
X and X ′ , it needs to discuss in two aspect. ⎩ k ( j) m( j) k ( j)

The first one is discribing determination vector in language.
Suppose X = [ x1 , x2 , , xn ] is a decision vector,
xi ( i = 1, 2, , n ) are the eigenvalues like high, middle or low.
Certainly it can be discribed more specifically. The following
is the defined fuzzy sets.
in the formula, f k f is parameter of the overlap degree in
decision-making space. Formula (3) and (4) make the n
demensions dermination vectors turn to 3n demensions
vectors.
B. Membership Function of Determination Vectorst

⎧ ⎧ 0.02 0.06 0.95 ⎫ Based on the artificial intelligent theory, the vectors using
⎪ high = ⎨ L , M , H ⎬ to describe the real world are not integrated especially for
⎩ ⎭
⎪ management problems. Which we own is only Y = f ( X ′ ) , so
⎪ ⎧ 0.70 0.95 0.70 ⎫
⎨ middle = ⎨ , , ⎬ (1) introduce the membership function to NN and make it’s output
⎪ ⎩ L M H ⎭ in the range of [ 0,1] . Therefor the membership function could
⎪ ⎧ 0.95 0.60 0.02 ⎫
⎪ low = ⎨ , , reflect the degree[7]. Suppose m is the number of species of
⎬
⎩ ⎩ L M H ⎭ decision making, Qk and Vk respectively indicate the
determination vectors’ medium value and standard
so n demensions dermination vectors are turn to 3n demensions deviation.of kth vector species. So
vectors
X = ⎡⎣ μl ( x j ) ( X ) , μm ( x j ) ( X ) , μ k ( x j ) ( X ) , , μl ( xm ) 2
p ⎡ xij − okj ⎤
Z ik = ∑ ⎢ ⎥ k = 1, 2, ,m (5)
⎢ vkj ⎦⎥
j =1 ⎣
( X ) , μm ( xm )( X ) , μk ( xm )( X )⎤⎦ , the μl ( x j ) , μm ( x j )
and μk ( x j ) are determined by formula (1). means the distance of X i and the kth decision. X i of the
membership gradeis
The second one is discribing determination vector in
figures. Known π functon is 1
μk ( X i ) = k = 1, 2, ,m (6)
⎛x ⎞
⎧ ⎛ 2 1⎜ ik ⎟ f 0
r −c ⎞ φ ⎝ fl ⎠
⎪2 ⎜1 − ⎟ ≤ r −c ≤φ
⎪ ⎝ φ ⎠ 2
⎪ 2 f l and f 0 are the constants of membership function.
⎪ ⎛ r −c ⎞ φ (2)
π ( r, C,φ ) = ⎨1 − 2 ⎜1 − ⎟ 0 ≤ r −c ≤
⎪ ⎝ φ ⎠ 2
⎪0 else
⎪
⎪
⎩

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 IV FUZZY NEURAL NETWORK IN MANAGEMENT
DECISION MAKING
Known X’s fuzzy function is f n ( X ) and it’s beyond fuzzy
function is f nλ ( X ) . In management decision making
problems, f n ( X ) is the subject degree and f nλ ( X ) supplies
the uncertainty caused by the error message information. Just
as reference [5] shows that, In decision-making two fuuzy
fuctions is better than only one fuzzy function in supplying
uncertain informations. Because they take account of the
potential or already exists error in decision making. In this
paper the fuzzy NN decision making model is constructed by
three NN models which are NN0,NN1,NN2. in decision making
problems, each output is correspondence with a certain
decision. The standard output of NN is 0 or 1, but the fuzzy
NN’s output is a real number from 0 to 1. Defines
ymax = y { x x = [1, ,1]} , ymin = y { x x = [ 0, , 0]} . For each
output y, we have 0 < ymin ≤ y ≤ ymax < 1 . So training fuzzy
NN’s determin vectors is accomplished by the following steps.
Suppose SC1 is a set which contains error vectors in C species
and SC 2 is a set which which contains error vectors in non C
species.
8. Using decision vectors X 0 and beyond fuzzy ynλ ( X a ) to
train NN1.
9. Repeat setp 8. Using decision vectors in SC 2 to train NN2.
For any decision vector, because of the lessness of priori
knowledge, the decision-making on the produce is often
unpredictable, so the only way to get it is learning. The BP
algorithm based on fuzzy representaion. To process the initial
vectors in model NN and gains the monotone plane and then
gets the vectors which used to train NN1 and NN2 by step 2 to
step 9.
V CONCLUSION
The methods proposed in resolving management decision
making problem is a exploratory research. The combination of
fuzzy and neural network make a great significance in
management science. But there are still many problems needed
to be resolved. The first one is how to communicate fuzzy and
neural network well. And then is how to build the membership
function of real problem. The third one is how to reflect the
standpoints of decision person in good time, for the standpoints
of decision person are changing with time and environment.

1. Do the linear pretreatment for the initial decision making References

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5. Do normal transformations for y( Xa ) ,
y ( X a ) − ymin
y′ ( X a ) =
ymax − ymin

6. If X a ∈ SC 1 , yC′ 1 ( X a ) = y ′ ( X a ) ,
1 − yC′ 1 ( X a )
yCλ1′ ( X a ) = 1 − . If X a ∈ SC 2 ,
1 + λ yC′ 1 ( X a )
1 − yC′ 2 ( X a )
yC′ 2 ( X a ) = 1 − y ′ ( X a ) , yCλ 2′ ( X a ) = 1 − .
1 + λ yC′ 2 ( X a )

7. Do the following function generation for yCλ1′ ( X a ) and

yCλ2′ ( X a ) . y λ ′ ( X a ) = y λ ′ ( X a ) . [ ymax − ymin ] + ymin

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