Strategic planning and performance measurement using Fuzzy DEMATEL : A case study of Iran Kaolin and Barite company

Article history: Received January 18, 2013 Received in revised format 10 May 2013 Accepted May 15 2013 Available online May 16 2013 This paper presents an empirical investigation to measure the performance of a mining firm in province of Semnan, Iran based on fuzzy fuzzy Decision Making Trial and Evaluation Laboratory (DEMATEL) technique. The proposed study of this paper uses strength, weakness, opportunity and threat (SWOT) technique to analyze the firm and using DEMATEL rank various items based on their relative importance. Based on the results of our survey, cost reduction and increase investment in mining sector are the most important components of this survey. The study also compares the results with similar study, which has recently been accomplished and we believe the proposed model is capable of detecting possible threats and helping us provide possible actions. © 2013 Growing Science Ltd. All rights reserved.


Introduction
Many managerial decisions are involved with a set of different criteria where we often see some sorts of conflict among them leading us to use multi-criteria decision making (MCDM) techniques.Existing methods of equity investment, such as fundamental analysis, technical analysis, and institutional investor analysis, explore essential factors of stock price behaviors.Lee et al. (2011) provided the first analysis on the interactive relationships among the factors in incorporating the techniques of Decision Making Trial and Evaluation Laboratory (DEMATEL) (Fontela & Gabus, 1974) and Analytic Network Process (ANP) (Saaty, 1994(Saaty, , 2004)).They reported that factors from the existing analytical methodologies had significant interactive and self-feedback dynamics.Among the key factors, profitability has been the most important one influencing investment decision, followed by growth and trading volume.In addition, due to the complexity of the ANP, this study proposed a new method to simplify the process, and empirical evidences indicated that the approach was effective and efficient.
According to Lin and Wu (2008) Causal analysis largely impacts the effectiveness of decisionmaking and the productivity of actions.The complicated relationship between cause and effect as well as the fuzzy nature of human judgment often make the casual analysis more difficult.Lin and Wu (2008) developed a fuzzy DEMATEL method for group decision-making to gather group ideas and analyzed the cause-effect relationship of complex problems in fuzzy environments.They used the fuzzy DEMATEL procedures and separated the involved criteria of a system into the cause and effect groups to help decision-makers concentrate on those criteria, which provide important impact.They presented an empirical study based on their proposed fuzzy DEMATEL method to the R&D project selection of a Taiwanese firm.They reported that, within the cause group, the criterion of "probability of technical success" was the most important items for R&D project selection, whereas the "strategic fit" and "potential size of market" have the best impact on the other criteria.Tzeng et al. (2007) proposed a new hybrid MCDM model to address the independent relationship of evaluation criteria with the help of factor analysis and the dependent relationship of evaluation criteria with the aid of DEMATEL.They used analytical hierarchy process (AHP) (Saaty & Vargas, 1994) and the fuzzy integral techniques (Li, 1999) for synthetic utility in accordance with subjective perception environment.Empirical results indicated that the proposed model was capable of producing effective evaluation of e-learning programs with adequate criteria that fit with respondent's perception patterns, especially when the evaluation criteria were numerous and intertwined.Zhou et al. (2011) discussed on how to enhance emergency management by segmenting complex impacting factors into groups to improve them in a stepwise way.To address this concern involving the vagueness of human judgments, they used an efficient technique that mixes fuzzy logic and DEMATEL.Considering the interdependence among factors, this fuzzy DEMATEL technique formed a structural model and then visualizes the causal relationships among factors through a causeeffect relationship diagram.Then based on the results of their proposed method, critical success factor (CSF) of emergency management was detected.They identified five factors out of 20 ones where all factors could be achieved in a stepwise way for better promoting the effectiveness and efficiency of emergency management.Yang et al. (2008) proposed a novel hybrid MCDM model combined with DEMATEL and ANP to handle the dependence and feedback problems to suit the real-world applications.They also gave an instance to show the proposed method with applications thereof.Their results demonstrated the proposed method is more suitable for real-world applications than the traditional ones.Opricovic and Tzeng (2003) proposed fuzzy MCDM (FMCDM), which consists of two phases.In the first phase, the CFCS phase, the method converts the Fuzzy data into Crisp Scores, and the MCDM phase, MCDM.The model seems to be applicable for defuzzification within the MCDM model with a mixed set of crisp and fuzzy criteria.The CFCS method is based on the procedure of determining the left and right scores by fuzzy min and fuzzy max, respectively, and the total score is computed a weighted average based on the membership functions.

The proposed model
The proposed model of this paper uses fuzzy DEMATEL for ranking various strategies extracted SWOT matrix (Lee & Walsh, 2011).In this section, we present details of the implementation of our proposed method.
Step 4. Normalize decision making matrix as follows, (2) Now, in order to convert scale criteria into measurable scales we use linearization technique.Let k X  be relationship matrix associated with k th decision maker, which is defined as follows, Like standard DEMATEL we assume there is at least one i where Step 5.In order to compute total relation fuzzy matrix we first need to make sure that 0 and consider the following three matrices, Like deterministic DEMATEL we define the following, , where

Case study
The proposed study of this paper is implemented for one of Iranian firm called Iran Kaolin and Barite company located in province of Semnan, Iran.Iran Kaolin and Barite company was established in 1992 and it produces and provides mineral products needed by industries such as oil and gas drilling, chemical and ceramic.The company is one of major producers of industrial mineral powders such as Barite, Bentonite and Hematite according to API, OCMA & ASTM standards, micronized calcium carbonate, Kaolin, Talc, Feldespar, Silicaflour and other mineral powders.The firm is also active in exporting its products to the countries in the Persian Gulf region and CIS countries.Table 1 demonstrates the summary of SWOT for our study.In order to accomplish the SWOT strategies, we need to ask decision makers to express their opinions in terms of verbal language.Now we are able to compute X  for different constructive components of various strategies.

Table 7
The summary for X 

Table 9
The summary for u X

Table 10
The summary of

Table 11
The summary of

Table 12
The summary of   As we can observe from the results of Table 15, cost reduction and increase investment in mining sector are the most important components of this survey.

Discussion and conclusion
In this paper, we have presented an empirical investigation to determine weakness, strength, opportunities and possible threats (SWOT) for a case study of an Iranian firm named Kaolin and Barite company, which was doing business on providing mineral products needed by industries such as oil and gas drilling, chemical and ceramic.They discussed different issues influencing the market activities using SWOT analysis and then ranked important components based on fuzzy DEMATEL.
Based on the results of our survey, cost reduction and increase investment in mining sector are the most important components of this survey.The implementation of DEMATEL for ranking different alternatives has recently become popular among researchers (Shepherd & Günter, 2006;Amiri et al., 2011).Najmi and Makui (2010), for instance, provided hierarchical approach for measuring supply chain performance using AHP and DEMATEL methodologies.Sofiyabadi et al. (2012) presented an integrated balanced score card combined with DEMATEL technique to prioritize different alternatives for supply chain implementation.Danaei and Omidifard (2013) performed strategic planning and performance measurement using balanced scorecard (BSC) (Kaplan & Norton, 1992, 1996, 2004) for the same case study.The results of their survey indicated that the firm was able to make a 30% improvement on its performance after one-year implementation of BSC.In other words, the firm was able to make 59% improvement on learning and growth, 33% growth on internal process, 32% growth on customer and 21% improvement on financial figures.
We hope the results of this survey along with other investigations accomplished recently could help this industry grow faster and build better business activities.

Table 1
The summary of SWOT Table 2 to Table 5 demonstrate details of our findings as follows,

Table 6
summarizes the results of relationships between different actions.

Table 8
The summary for m X Finally, we may present details of suitable strategies for the proposed case study of this paper in Table15as follows,