Soft Computing Evaluation Logic

3.6Cost/Suitability Analysis as a Graded Logic Problem

Price is what you pay. Value is what you get.

—Warren E. Buffett / Benjamin Graham

At the end of an evaluation process, the decision maker knows the overall suitability degrees of all evaluated objects. We assume that the overall suitability is expressed as a score that determines the degree of satisfaction of justifiable stakeholder’s requirements. In addition, the overall suitability has to be in balance with the total cost the stakeholder must pay to attain the given degree of satisfaction of requirements. Finding the degree of such a balance is the subject of the cost/suitability analysis. More precisely, we are interested in the relationship of the overall suitability and its counterpart, the total cost.

We call this analysis the cost/suitability analysis, but other terms are equally convenient and sometimes used: instead of suitability we sometimes use preference, and instead of cost it is sometimes convenient to use its reciprocal, and call it affordability. This problem is closely related to traditional cost‐effectiveness analysis [SEI69] and cost‐value techniques [JOS64, JOS68]. However, our approach to cost/suitability analysis is from the soft computing point of view, and our solution is based on graded logic.

3.6.1 Cost Analysis

In this section our goal is to compute a total cost indicator that reflects aggregated cost components of an evaluated object. The total cost can be decomposed into individual components, ...