Information Fusion for Making Credit Decision of PPP Road Projects Boeing

The systematic aggregation of information is crucial in decision making. If the information is derived from various sources, then the information fusion problem can be transformed into a multi-criteria decision making model. The information fusion problem, thus, is reduced to (a) determining the structure of the hierarchy to be used; (b) computing the degree of satisfaction of criteria based on the observed features; and (c) the nature of the connectives at each node of the hierarchy. The degrees of satisfaction of criteria need to be determined in linguistic terms in case the information is not precise and complete in nature. In view of this, the suitable aggregation operators are the fuzzy connectives. Choquet fuzzy integral is one of the preferred fuzzy connectives for aggregating the information in case there are interactions between the criteria. This paper discusses the application of Choquet fuzzy integral in information fusion with the help of the information the lenders used in making credit decision to Public Private Partnership (PPP) road projects. Lenders to PPP road projects are more concerned with the debt servicing capability of the projects. Lenders aggregate information on the performance of the project with respect to the various aspects, which can influence the debt servicing capability, of the project to assess whether the risk/reward profile of the project match their risk/reward appetite. Information fusion using Choquet fuzzy integral facilitates systematic aggregation of the information and enables the lenders to derive the degree of match between their risk/reward appetite and the risk/reward profile of the project.