A grey decision and prediction model for investment in the core competitiveness of product development

Article history: Received 18 December 2009 Received in revised form 25 December 2010 Accepted 1 March 2011 Available online 3 April 2011 Because enterprises do not disclose their internal specific cost information to the public and, moreover, every firm has its own product character and financial constitutions, it is difficult to offer fixed guidelines for investment decisions. Thus, an enterprise may be uncertain when required to choose the most promising set of possible investments. The goal of this research is to use a grey relation analysis and analytic hierarchy process (AHP) to probe the core product development and competitiveness of an enterprise from limited data and, furthermore, by constructing the grey model, GM(1,1), to validate the feasibility of this assessment of the core competitiveness and investment strategy. In this study, a precision mechanical manufacturer is taken as an example, and the forecast estimate from this method is compared to those of a linear regression and the actual values to demonstrate the feasibility of applying this methodology to investment decision making, hence, demonstrating the value of this research. © 2011 Elsevier Inc. All rights reserved.