Re: Fuzziness as opposed to Probability

From: Paul Victor Birke (nonlinear@home.com)
Date: Sun Aug 05 2001 - 13:36:53 MET DST

  • Next message: Rui Brites: "help: Master Thesis"

    predictr@bellatlantic.net wrote:
    >
    > Will Dwinnell wrote:
    >
    > "Here is a simple fuzzy logic system, borrowed from an example given in
    > "The Fuzzy Systems Handbook", by Earl Cox. The problem is to establish
    > the price of a product. The fuzzy system has 4 rules:
    >
    > 1. The price should be high
    > 2. The price must be low
    > 3. The price must be around 2 times cost
    > 4. If the competition price is not very high, then the price should be
    > near the competition price
    >
    *****************
    Dear Will

    I worked on >>Fuzzy Pricing<< for ~one year back circa 1995. The
    subject is a little more complicated than what Earl Cox has suggested.
    However, Earl is in the spirit and his system should produce reasonable
    answers. I am personally surprised that Fuzzy Pricing has not caught
    on. At the time, there was difficulty in Management to believe in the
    system and maybe Radford Neal comments address some of the concerns.
    There is no doubt some model (Game Model) must be made wrt the
    competitors and what they are likely doing and how they may be pricing.
    Pricing has little to do with cost except as Earl Cox is stating some
    reasonable assumption must be made about the profit region interval.
    The comment made about no attempt to model the (Nonlinear) Demand
    Elasticity of the market and if you will the individual ones seem
    outbound be each company in that market for that product by Radford Neal
    is well taken. Demand models should be made an used as constraints.

    Finally I would like to add that I arrived at a Fuzzy Price Interval
    from a method that maximized the Fuzzy Expectation for my company.

    I used definitions like
    Ultra Low Price
    Low Price
    High Price
    Ultra High Price.

    I think this discussion in the NG is healthy and both Earl and Radford
    have relevant points.

    I still believe pricing is fuzzy and can be mechanized as a >>strong
    aid<< to actually setting the price in a standard product to the market
    or to competitive bidding in which was my arena at that time.

    Paul V. Birke, P. Eng.
    NN Researcher
    Guelph ON CANADA

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