The potential use of DEA for credit applicant acceptance systems
Computers and Operations Research - Special issue on data envelopment analysis
An acceptance system decision rule with data envelopment analysis
Computers and Operations Research
ROSE - Software Implementation of the Rough Set Theory
RSCTC '98 Proceedings of the First International Conference on Rough Sets and Current Trends in Computing
Beyond business failure prediction
Expert Systems with Applications: An International Journal
Fuzzy Support Vector Machine for bankruptcy prediction
Applied Soft Computing
Direct mailing decisions based on the worst and best practice cross-efficiency evaluations
International Journal of Business Information Systems
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This paper proposes a hybrid approach that predicts the failure of firms based on the past business data, combining rough set approach and worst practice data envelopment analysis (DEA). The worst practice DEA can identify worst performers (in quantitative financial data) by placing them on the frontier while the rules developed by rough set uses non-financial information to predict the characteristics of failed firms. Both DEA and rough set are commonly used in practice. Both have limitations. The hybrid model Rough DEA takes the best of both models, by avoiding the pitfalls of each. For the experiment, the financial data of 396 Taiwan firms during the period 2002-2003 were selected. The results show that the hybrid approach is a promising alternative to the conventional methods for failure prediction.