Real options valuation of an IoT based healthcare device with interval Type-2 fuzzy numbers

Tolga A. Ç.

SOCIO-ECONOMIC PLANNING SCIENCES, vol.69, 2020 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 69
  • Publication Date: 2020
  • Doi Number: 10.1016/j.seps.2019.02.008
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, International Bibliography of Social Sciences, Business Source Elite, Business Source Premier, EconLit, Educational research abstracts (ERA), Geobase, INSPEC, Political Science Complete, Public Affairs Index, Social services abstracts, Sociological abstracts, Worldwide Political Science Abstracts
  • Keywords: Interval Type-2 fuzzy numbers, Possibility theory, Real options, Healthcare, Device evaluation, DECISION-MAKING, SYSTEMS, RANKING
  • Galatasaray University Affiliated: Yes


Medical devices have attained increasing importance in diagnosis and treatment in the healthcare system in recent years due to technological advancements. Along with this progress, the IoT property in these devices reduces the supply time, which is very critical in increasing their up periods. Often, certain medical devices used in treatment require a major portion of the investment. Such huge capital goods are generally irreversible investments. Depending on the strategic view and irreversibility, medical device assessment requires a sophisticated evaluation method called real options. However, there are many ambiguities during the investment period and while gathering the data for the evaluation. Interval type-2 fuzzy logic fits like a glove for such vague conditions and lack of data. In this study, an interval type-2 fuzzy set integrated real option analysis is offered for medical treatment device evaluation. Possibilistic mean value and possibilistic variance of interval type-2 fuzzy sets are found for the purpose of the real options analysis. This offered method is applied to a real case in a healthcare system. Sensitivity analysis provides many different viewpoints. At the end of the procedure, the institution decides whether to perform the investment now or one year later.