Fuzzy engineering economic analysis

This paper presents an approach for including nonstatistical uncertainties in engineering economic analysis, particularly utility economic analysis, by modeling uncertain variables with fuzzy numbers. In this case, the mathematical operations are defined by the extension principle and the results obtained are also in a form of fuzzy numbers. This approach can be seen as an extension of a previously proposed one that uses interval numbers and interval analysis for including such uncertainties. However, this paper considers also the dependence which may exist between the fuzzy variables and shows the impact this dependence may have on the results. In this context, a way of modeling partial correlation between the variables of the same kind is proposed.