Fuzzy Methods For Economics and Business

Fuzzy Methods for Economics and
Business
Part 2: Fuzzy numbers
Luca Anzilli∗ and Fabrizio Durante

∗ Dipartimentodi Scienze dell’Economia
Università del Salento, Lecce, Italy
luca.anzilli@unisalento.it
Lecce, July 2018

c L. Anzilli (UNISALENTO) Fuzzy Methods 1 / 49
Notation
universe set: U, X
fuzzy set: A, Ã
membership function: µA (x), A(x), µ(x)
α-cut: Aα , Aα , A(α)
endpoints of α-cut Aα : [aL (α), aR (α)], [aL (α), aU (α)], [AL (α), AR (α)],
[a(α), a(α)], [aα , aα ]
complement: Ac , A0 , Ā

Fuzzy sets
Let U be the universe of discourse.

A fuzzy set A on U is defined by the set of pairs
A = {(x, µA (x)) : x ∈ U}
where the function

µA : U → [0, 1]
is called the membership function of A.
µA (x) = the membership grade of x to A, or the degree of compatibility of x
with A, or the degree of truth of the sentence “x is in A”.
We denote by F(U) the family of all fuzzy subsets of U.

α-cuts of fuzzy sets
Let A be a fuzzy subset of U.

Definition (α-cuts)
For all α ∈ [0, 1] the α-cut of A (or α-level set) is the crisp set Aα defined by:
if 0 < α ≤ 1
Aα = {x ∈ U : µA (x) ≥ α} ;
if α = 0
A0 is the closure of the support of A,
being the support of A the crisp set supp(A) = {x ∈ U : µA (x) > 0}.

α-cuts of convex fuzzy sets

α-cuts of convex fuzzy sets
A
α
x
Aα

α-cuts of non-convex fuzzy sets

α-cuts of non-convex fuzzy sets
x
Aα

Example
Find the α-cuts of the fuzzy set A defined by the membership function

 0 x<1
x−1


1≤x<3



µA (x) = 2
 1 3≤x≤4
5−x 4<x≤5





0 x>5

Properties
0 ≤ α ≤ β ≤ 1 =⇒ Aα ⊇ Aβ
if A, B ∈ F(U)
(A ∩ B)α = Aα ∩ Bα , (A ∪ B)α = Aα ∪ Bα
where ∩ and ∪ are the standard fuzzy set operations
if A, B ∈ F(U)
A ⊆ B ⇐⇒ Aα ⊆ Bα ∀ α ∈ [0, 1]
where A ⊆ B ⇐⇒ µA (x) ≤ µB (x) for all x ∈ U

Decomposition theorem
For every A ∈ F(U) [

A= (α · Aα )
α∈[0,1]
where ∪ denotes the standard fuzzy union, that is
µA (x) = sup α · 1Aα (x) ∀x ∈ U.

α∈[0,1]
By decomposition theorem, a fuzzy set can be identified by the family of

all its α-cuts.

Example
Find the fuzzy set A having α-cuts
√
Aα = [1 + α2 , 4 − α] α ∈ [0, 1] .

Fuzzy numbers
Definition
Let U = R. A fuzzy number is a fuzzy set A ∈ F(R) such that
(1) for all α ∈ [0, 1]
Aα = {x ∈ R : µA (x) ≥ α} = [AL (α), AR (α)]
is a closed interval;
(2) supp(A) = {x ∈ R; µA (x) > 0} is a bounded set in R;
(3) there exists x ∈ R such that µA (x) = 1.

From the previous definition it follows that the membership function of a
fuzzy number A can be written as

 0
 x < a1 or x > a4
`A (x) a1 ≤ x < a2

µA (x) =

 1 a2 ≤ x ≤ a3
rA (x) a3 < x ≤ a4

where a1 ≤ a2 ≤ a3 ≤ a4 ,
`A is a non-decreasing and right-continuous function,
rA is a non-increasing and left-continuous function.
Observe that
A0 = [a1 , a4 ]
A1 = [a2 , a3 ] = core(A)

Crisp numbers
A crisp number m has membership function
(
1 x=m
µ(x) =
0 otherwise

Triangular fuzzy numbers
A triangular fuzzy number A = (a1 , a2 , a3 ), with a1 < a2 < a3 is defined by

the membership function

 0 x < a1
x − a1


a1 ≤ x < a2



 a2 − a1

µA (x) = 1 x = a2
 a3 − x
a2 < x ≤ a3



 a3 − a2



0 x > a3

Trapezoidal fuzzy numbers
A trapezoidal fuzzy number A = (a1 , a2 , a3 , a4 ), with a1 < a2 ≤ a3 < a4 is

defined by the membership function

 0 x < a1
x − a1


a1 ≤ x < a2



 a2 − a1

µA (x) = 1 a2 ≤ x ≤ a3
 a4 − x
a3 < x ≤ a4



 a4 − a3



0 x > a4

Gaussian fuzzy numbers
A quasi-Gaussian fuzzy number has membership function


 0 x < m − aσ1
(x−m)2



 − 2
 e 2σ1 m − tσ1 ≤ x < m


µA (x) = 1 x=m
(x−m)2

−

2

e 2σ2 m < x ≤ m + tσ2





0 x > m + aσ2
where t > 0 is a tolerance parameter.

Example


Definition
A fuzzy number A is said to be
non-negative if µA (x) = 0 for all x < 0
non-positive if µA (x) = 0 for all x > 0

Arithmetic operations on fuzzy numbers
There are two methods for developing fuzzy arithmetic:

(i) one based on interval arithmetic;
(ii) one based on the Zadeh’s extension principle.
The two methods are not equivalent. But for basic arithmetic, when each
fuzzy number appears only once in the fuzzy expression, the two methods
produce the same results.

Zadeh’s extension principle
Any given crisp function f : U → V, y = f (x), induces a function,

denoted by the same symbol f ,
f : F(U) → F(V)
that associates to each fuzzy subset A ∈ F(U) the fuzzy subset

B = f (A) ∈ F(V) defined by
µB (y) = sup µA (x) .

{x : y=f (x)}
[With the convention: sup ∅ = 0]

Any given crisp function f : U × V → W, z = f (x, y), induces a function,
denoted by the same symbol f ,
f : F(U) × F(V) → F(W)
that associates to each pair of fuzzy subsets (A, B) ∈ F(U) × F(V) the
fuzzy subset C = f (A, B) ∈ F(W) defined by
µC (z) = sup min{µA (x), µB (y)} .

{(x,y) : z=f (x,y)}

Arithmetic operations on intervals
Let A = [a1 , a2 ] and B = [b1 , b2 ] two intervals.

The operation ∗ ∈ {+, −, ·, /} is defined by
A ∗ B = {a ∗ b ; a ∈ A , b ∈ B}
(division (/) is not defined if 0 ∈ B).

From previous definition we have:
addition
[a1 , a2 ] + [b1 , b2 ] = [a1 + b1 , a2 + b2 ]
difference
[a1 , a2 ] − [b1 , b2 ] = [a1 − b2 , a2 − b1 ]

Let [a1 , a2 ] and [b1 , b2 ] be two intervals of R+ , that is a1 , b1 ≥ 0.
Then
[a1 , a2 ] · [b1 , b2 ] = [a1 b1 , a2 b2 ]
[a1 , a2 ]/[b1 , b2 ] = [a1 /b2 , a2 /b1 ] (if b1 > 0 )
inverse: [a1 , a2 ]−1 = [1/a2 , 1/a1 ] (if a1 > 0 )
if k ≥ 0 then k · [a1 , a2 ] = [k a1 , k a2 ]
division by k > 0 is equivalent to multiplication by 1/k.

General case:
product
[a1 , a2 ]·[b1 , b2 ] =
= [min(a1 b1 , a1 b2 , a2 b1 , a2 b2 ), max(a1 b1 , a1 b2 , a2 b1 , a2 b2 )]
division, provided that 0 ∈

/ [b1 , b2 ]
[a1 , a2 ]/[b1 , b2 ] = [a1 , a2 ] · [1/b2 , 1/b1 ] =

= [min(a1 /b1 , a1 /b2 , a2 /b1 , a2 /b2 ), max(a1 /b1 , a1 /b2 , a2 /b1 , a2 /b2 )]
inverse interval, provided that 0 ∈

/ [a1 , a2 ]
[a1 , a2 ]−1 = [1, 1]/[a1 , a2 ]
multiplication by a scalar value (a real number k may be regarded as a

special (degenerated) interval [k, k])
k · [b1 , b2 ] = [min(k b1 , k b2 ), max(k b1 , k b2 )]

Example
Let A = [3, 5] and B = [−2, 7]. We have
A + B = [1, 12]
A − B = [−4, 7]
A · B = [−10, 35]
A − A = [−2, 2]
A/A = [3/5, 5/3]
Observe that
A − A = [a1 − a2 , a2 − a1 ] 6= 0 = [0, 0]
and
A · A−1 = [a1 /a2 , a2 /a1 ] 6= 1 = [1, 1]

Properties
Let A = [a1 , a2 ], B = [b1 , b2 ], C = [c1 , c2 ], D = [d1 , d2 ], 0 = [0, 0], 1 = [1, 1].

We have
A + B = B + A,
A · B = B · A (commutativity);
(A + B) + C = A + (B + C),
(A · B) · C = A · (B · C) (associativity);
A = 0 + A = A + 0,
A = 1 · A = A · 1 (identity);
A · (B + C) ⊆ A · B + A · C (subdistributivity);
if b · c ≥ 0 for all b ∈ B and c ∈ C then A · (B + C) = A · B + A · C
(distributivity).
In particular, if A = [a, a] then a · (B + C) = a · B + a · C.

0 ∈ A − A and 1 ∈ A/A;
if A ⊆ E and B ⊆ F then
A+B ⊆ E+F
A−B ⊆ E−F
A·B ⊆ E·F
A/B ⊆ E/F

Distributivity property does not hold in general.
Let A = [0, 1], B = [1, 2] and C = [−2, −1].

We have
A · B = [0, 2],
A · C = [−2, 0],
B + C = [−1, 1].
Then
A · (B + C) = [−1, 1] $ [−2, 2] = A · B + A · C .

Remark
The image −A (or A− ) of the interval A = [a1 , a2 ] is −A = [−a2 , −a1 ].
Note that A − A = A + (−A) = [a1 − a2 , a2 − a1 ].
Hence A − A 6= 0 (for a1 6= a2 ).

Example
Find a solution X = [x1 , x2 ], with x1 ≤ x2 , of the equation
A+X =B
being A = [1, 3] and B = [5, 6].

Arithmetic operations on fuzzy numbers

Addition
Let A and B be two fuzzy numbers. The sum A + B is the fuzzy number
defined by
(A + B)α = Aα + Bα = [AL (α) + BL (α), AR (α) + BR (α)] α ∈ [0, 1]
The following properties are satisfied

A + B = B + A (commutative)
(A + B) + C = A + (B + C) (associative)
A+0=0+A=A
A + A− = A− + A 6= 0 (if A is not a real number)
− −
where A (i.e. Aα = [−AL (α), −AR (α)] for all α ∈ [0, 1]) is the image
of A

Subtraction
If A and B are two fuzzy numbers the difference A − B is the fuzzy number
defined by
(A − B)α = Aα − Bα = [AL (α) − BR (α), AR (α) − BL (α)]
The image A− (or −A) of A is the fuzzy number defined by
A−
α = [−AR (α), −AL (α)] ∀ α ∈ [0, 1] .

Multiplication
Let A and B be two non-negative fuzzy numbers. Then the product A · B is the
non-negative fuzzy number defined by
(A · B)α = Aα · Bα = [AL (α) BL (α) , AL (α) BR (α)] .
Properties
A · B = B · A (commutative)
(A · B) · C = A · (B · C) (associative)
A·1=1·A=A
A · A−1 = A−1 · A 6= 1 (if A is not a real number)
where A is the inverse of A defined by A−1
−1
α = [1/AR (α), 1/AL (α)] for
all α ∈ [0, 1] if AL (0) > 0
Note that
(−A) · B = −(A · B)
(A · B)−1 = A−1 · B−1

Power of a fuzzy number
The nth power of a non-negative fuzzy number is recursively defined as
An = A · An−1 .
We have
An · Am = An+m
An = (A−1 )n = (An )−1
An · Am = An+m
(A−1 )−1 = A
An · Bn = (A · B)n
(An )m = An m
An /Am = An · A−m = An−m

Division
Let A and B be two non-negative fuzzy numbers such that BL (0) > 0. Then
A/B is the fuzzy number defined by
(A/B)α = Aα /Bα = [AL (α)/BR (α) , AR (α)/BL (α)]
The inverse of A is defined by, if AL (0) > 0,
A−1
α = [1/AR (α), 1/AL (α)] .

Multiplication by an ordinary number (scalar multiplication)
Let A be a fuzzy number and k ∈ R. We have
k · Aα = [k AL (α) , k AR (α)] if k > 0

k · Aα = [k AR (α) , k AL (α)] if k < 0.

Distributivity in R+
For all A, B, C fuzzy numbers in R+ we have
(A + B) · C = (A · C) + (B · C)
and also (by commutativity)
A · (B + C) = (A · B) + (A · C)
Distributivity
If A is either a positive or a negative fuzzy number and B, C are together either
positive or negative fuzzy numbers, then
A · (B + C) = (A · B) + (A · C) .
We observe that if B and C have opposite signs, distributivity no longer holds.

However A · (B + C) ⊆ (A · B) + (A · C) always holds, i.e. the right-hand
side is fuzzier.

Note that
(A − B) + B 6= A
and
(A/B) · B 6= A .

Example
Let us consider the trapezoidal fuzzy number A = (1, 2, 3, 4) with

membership function


 0 x<1
 lA (x) = x − 1 1≤x<2


µA (x) = 1 2≤x≤3
r (x) = 4 − x 3 <x≤4

A



0 x>4

For all α ∈ [0, 1] we have
Aα = [1 + α, 4 − α] .

The inverse B of A is
Bα = A−1 −1 −1
α = [(4 − α) , (1 + α) ] , α ∈ [0, 1]
that is 

 0 x < 1/4

 1
 lB (x) = 4 − x 1/4 ≤ x < 1/3



µB (x) = 1 1/3 ≤ x ≤ 1/2
 r (x) = 1 − 1


 B 1/2 < x ≤ 1
x



0 x>1


The power C = A−2 = B2 is
Cα = [(4 − α)−2 , (1 + α)−2 ] , α ∈ [0, 1]
that is 

 0 x < 1/16

 1
lC (x) = 4 − √ 1/16 ≤ x < 1/9




 x
µC (x) = 1 1/9 ≤ x ≤ 1/4

 1

 rC (x) = √ − 1 1/4 < x ≤ 1
x




 0 x > 1.
The power D = A−10 = B10 is
Dα = [(4 − α)−10 , (1 + α)−10 ] , α ∈ [0, 1] .

Moreover the power A2 is


 0√ x<1
 x−1 1≤x<4


µA2 (x) = 1 √ 4≤x≤9
4− x 9 < x ≤ 16




0 x > 16 .


Let us calculate B = 2 + A. Since
[2, 2]α = [2, 2] ∀ α ∈]0, 1]
we have (Aα = [1 + α, 4 − α])
Bα = [3 + α, 6 − α] .

Triangular fuzzy numbers
If A = (a1 , a2 , a3 ) and B = (b1 , b2 , b3 ) are triangular fuzzy numbers then

A + B = (a1 + b1 , a2 + b2 , a3 + b3 )
A − B = (a1 − b3 , a2 − b2 , a3 − b1 )
A− = (−a3 , −a2 , −a1 )
Example
If A = (−3, 2, 4) and B = (−1, 0, 6) then
A + B = (−4, 2, 10),
A − B = (−9, 2, 5).

Trapezoidal fuzzy numbers
If A = (a1 , a2 , a3 , a4 ) and B = (b1 , b2 , b3 , b4 ) are trapezoidal fuzzy numbers

then
A + B = (a1 + b1 , a2 + b2 , a3 + b3 , a4 + b4 )
A − B = (a1 − b4 , a2 − b3 , a3 − b2 , a4 − b1 )
A− = (−a4 , −a3 , −a2 , −a1 )

Evaluation of fuzzy numbers
Expected interval
Z 1 Z 1
∗
EI(A) = [E∗ (A), E (A)] = AL (α) dα, AR (α) dα .
0 0
Expected value
E∗ (A) + E∗ (A) 1
Z
AL (α) + AR (α)
EV(A) = = dα
2 0 2

Interval-valued possibilistic mean
Z 1 Z 1
M(A) = [M∗ (A), M∗ (A)] = 2 AL (α)α dα, 2 AR (α)α dα ,
0 0
Value (Possibilistic mean value)
M∗ (A) + M ∗ (A) 1
Z
Val(A) = = (AL (α) + AR (α)) α dα
2 0
Weighted possibilistic mean value

Z 1
AL (α) + AR (α)
Valf (A) = f (α) dα
0 2
where the weighting function f ≥ 0 satisfies the condition

Z 1
f (α) dα = 1
0


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Fuzzy Methods For Economics and Business

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Fuzzy Methods for Economics and

Luca Anzilli∗ and Fabrizio Durante

Lecce, July 2018

Let U be the universe of discourse.

where the function

Let A be a fuzzy subset of U.

where ∩ and ∪ are the standard fuzzy set operations

For every A ∈ F(U) [

where ∪ denotes the standard fuzzy union, that is

µA (x) = sup α · 1Aα (x) ∀x ∈ U.

By decomposition theorem, a fuzzy set can be identified by the family of

Aα = {x ∈ R : µA (x) ≥ α} = [AL (α), AR (α)]

A triangular fuzzy number A = (a1 , a2 , a3 ), with a1 < a2 < a3 is defined by

A trapezoidal fuzzy number A = (a1 , a2 , a3 , a4 ), with a1 < a2 ≤ a3 < a4 is

A quasi-Gaussian fuzzy number has membership function

where t > 0 is a tolerance parameter.

There are two methods for developing fuzzy arithmetic:

Any given crisp function f : U → V, y = f (x), induces a function,

that associates to each fuzzy subset A ∈ F(U) the fuzzy subset

µB (y) = sup µA (x) .

[With the convention: sup ∅ = 0]

f : F(U) × F(V) → F(W)

µC (z) = sup min{µA (x), µB (y)} .

Let A = [a1 , a2 ] and B = [b1 , b2 ] two intervals.

(division (/) is not defined if 0 ∈ B).

[a1 , a2 ]/[b1 , b2 ] = [a1 /b2 , a2 /b1 ] (if b1 > 0 )

inverse: [a1 , a2 ]−1 = [1/a2 , 1/a1 ] (if a1 > 0 )

division by k > 0 is equivalent to multiplication by 1/k.

division, provided that 0 ∈

[a1 , a2 ]/[b1 , b2 ] = [a1 , a2 ] · [1/b2 , 1/b1 ] =

inverse interval, provided that 0 ∈

[a1 , a2 ]−1 = [1, 1]/[a1 , a2 ]

multiplication by a scalar value (a real number k may be regarded as a

k · [b1 , b2 ] = [min(k b1 , k b2 ), max(k b1 , k b2 )]

Let A = [a1 , a2 ], B = [b1 , b2 ], C = [c1 , c2 ], D = [d1 , d2 ], 0 = [0, 0], 1 = [1, 1].

Let A = [0, 1], B = [1, 2] and C = [−2, −1].

being A = [1, 3] and B = [5, 6].

(A + B)α = Aα + Bα = [AL (α) + BL (α), AR (α) + BR (α)] α ∈ [0, 1]

The following properties are satisfied

(A − B)α = Aα − Bα = [AL (α) − BR (α), AR (α) − BL (α)]

The image A− (or −A) of A is the fuzzy number defined by

(A · B)α = Aα · Bα = [AL (α) BL (α) , AL (α) BR (α)] .

The nth power of a non-negative fuzzy number is recursively defined as

(A/B)α = Aα /Bα = [AL (α)/BR (α) , AR (α)/BL (α)]

The inverse of A is defined by, if AL (0) > 0,

Let A be a fuzzy number and k ∈ R. We have

k · Aα = [k AL (α) , k AR (α)] if k > 0

and also (by commutativity)

We observe that if B and C have opposite signs, distributivity no longer holds.

Let us consider the trapezoidal fuzzy number A = (1, 2, 3, 4) with

For all α ∈ [0, 1] we have

Cα = [(4 − α)−2 , (1 + α)−2 ] , α ∈ [0, 1]

Dα = [(4 − α)−10 , (1 + α)−10 ] , α ∈ [0, 1] .

[2, 2]α = [2, 2] ∀ α ∈]0, 1]

we have (Aα = [1 + α, 4 − α])

If A = (a1 , a2 , a3 ) and B = (b1 , b2 , b3 ) are triangular fuzzy numbers then

If A = (a1 , a2 , a3 , a4 ) and B = (b1 , b2 , b3 , b4 ) are trapezoidal fuzzy numbers

Value (Possibilistic mean value)

Weighted possibilistic mean value

where the weighting function f ≥ 0 satisfies the condition

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