Adjusting the errors of the GM(1, 2) grey model in the financial data series using an adaptive fuzzy controller
Abstract
Purpose
The purpose of this paper is to focus on the adjustment of the GM(1, 2) errors for financial data series that measures changes in the public sector financial indicators, taking into account that the errors in grey models remain a key problem in reconstructing the original data series.
Design/methodology/approach
Adjusting the errors in grey models must follow some rules that most often cannot be determined based on the chaotic trends they register in reconstructing data series. In order to ensure the adjustment of these errors, for improving the robustness of GM(1, 2), was constructed an adaptive fuzzy controller which is based on two input variables and one output variable. The input variables in the adaptive fuzzy controller are: the absolute error
Findings
The adaptive fuzzy controller has the advantage that sets the values for error adjustments by the intensity (size) of the errors, in this way being possible to determine the value adjustments for each element of the reconstructed financial data series.
Originality/value
To ensure a robust process of planning the financial resources, the available financial data are used for long periods of time, in order to notice the trend of the financial indicators that need to be planned. In this context, the financial data series could be reconstituted using grey models that are based on sequences of financial data that best describe the status of the analyzed indicators and the status of the relevant factors of influence. In this context, the present study proposes the construction of a fuzzy adaptive controller that with the help of the output variable will ensure the error’s adjustment in the reconstituted data series with GM(1, 2).
Keywords
Acknowledgements
The authors are acknowledging the support of Leverhulme Trust International Network research project “IN-2014-020.” The present paper has been presented at the Leverhulme meeting in Bucharest, Romania, September 2015. The authors thank all the participants for their constructive remarks and thoughts.
Citation
Bolos, M., Bradea, I. and Delcea, C. (2016), "Adjusting the errors of the GM(1, 2) grey model in the financial data series using an adaptive fuzzy controller", Grey Systems: Theory and Application, Vol. 6 No. 3, pp. 341-352. https://doi.org/10.1108/GS-12-2015-0079
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited