Profitability analysis with the fuzzy logic: A hospital example

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Tunay Aslan ORCID logo, Cevdet Kizil ORCID logo, Erdal Yilmaz ORCID logo

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Implementation of the fuzzy logic is a modern approach for cost-volume-profit analysis and decision-making process under risk and uncertainty (Yuan, 2009). The implementation of the fuzzy logic approach especially makes sense for profit or loss estimations in developing countries, where uncertainties and risks are often observed (Roztocki & Weistroffer, 2005). This study aimed to estimate the profit or loss of indirect Coombs blood test, which is among the 100 blood tests run by the laboratory department of a healthcare organization located in Istanbul, Turkey, that started operations in 2018. Another purpose of the research was to compare the profit or loss estimated by fuzzy logic with the actual values. Research questions of the study were: 1) Can fuzzy logic be used in the health sector’s profitability estimates? 2) What is the estimated success rate of fuzzy logic in the case of uncertainty and complexity? 3) If the fuzzy logic can be used in the health sector’s profit forecasts, how close are the estimated profit sums achieved by the fuzzy logic to the actual profit sums? Based on the findings of the study, profit estimated by the fuzzy logic is in a close range to actual values with a low error rate.

Keywords: Accounting, Finance, Fuzzy Logic, Profitability, Health Sector, Estimation

Authors’ individual contribution: Conceptualization — T.A.; Methodology — T.A.; Software — T.A.; Writing — Original Draft — T.A.; Investigation — C.K. and E.Y.; Writing — Review & Editing — C.K.; Project Administration — E.Y.; Supervision — E.Y.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: No financial interest or benefit has arisen from the direct applications of this research. All parties related to this manuscript have been informed of their inclusion and approve of this.

JEL Classification: C13, C60, I00, M40, M41

Received: 13.02.2021
Accepted: 06.09.2021
Published online: 09.09.2021

How to cite this paper: Aslan, T., Kizil, C., & Yilmaz, E. (2021). Profitability analysis with the fuzzy logic: A hospital example. Corporate Governance and Organizational Behavior Review, 5(2), 17–31.