Formalization of Requirements for Spatial Development Investment Projects

DOI

10.2991/aebmr.k.210710.004How to use a DOI?

Keywords

Discounted Cash Flow - methods (DFM-methods), environmental criteria, stakeholders, requirements-criteria, requirements-restrictions, fuzzy sets, degree of belonging to fuzzy set, system analysis of hierarchical structures, scripting method, subjective scale of qualitative gradations, latent vector, eigenvalue of pairwise comparison matrix, operation of crossing fuzzy sets (conjunction rule), weighted intersection of fuzzy sets

Abstract

One of the most important tasks in economy is to assess the economic efficiency of investment projects. Evaluation of the effectiveness of investment projects is of utmost importance at the pre-investment stage of the life cycle. However, the amount and nature of information available at this stage does not allow for the full application of traditional performance assessment methods based on discounting future cash flows (DCF-methods). However, these methods can be used by analyzing the information entity of each of the criteria underlying DCF-methods. At the same time, a set of these criteria is necessary but not enough, because during the stage of selection of investment projects by potential investors and decisions on their inclusion in financing programs, the stage of environmental screening plays a special role. At the same time, the main task is to define environmental criteria, which in most cases are not quantifiable, which leads to the need to process qualitative information. And besides, when assessing the effectiveness of investment projects, some criteria have the nature of limitations. In effect, criteria and restrictions are requirements that determine the needs of interested parties (stakeholders) – users, consumers, suppliers, developers, and businesses themselves. Therefore, the article uses the concepts of requirements-criteria and requirements-restrictions. The article presents a formal tool for describing various requirements and how to integrate them into a single model for assessing the effectiveness of investment projects at the pre-investment stage. As a formal tool for describing various requirements, the mathematical apparatus of fuzzy set theory and the methodology of system analysis of hierarchical structures are used. The use of fuzzy set theory as an instrumental basis for describing various requirements is although it does not eliminate the subjective nature of the concepts with which decision makers deal, it gives them the means to describe these subjective concepts in a rational way. The use of the proposed method of formalizing requirements and the formation of an assessment of the effectiveness of investment projects based on it is demonstrated on a model example.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Vladimir Kalugin
AU  - Aleksandra Dubskaya
AU  - German Poddubny
AU  - Eugeniy Bukhvald
PY  - 2021
DA  - 2021/07/14
TI  - Formalization of Requirements for Spatial Development Investment Projects
BT  - Proceedings of the 3rd International Conference Spatial Development of Territories (SDT 2020)
PB  - Atlantis Press
SP  - 20
EP  - 25
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210710.004
DO  - 10.2991/aebmr.k.210710.004
ID  - Kalugin2021
ER  -