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Paper Information

Journal:   JOURNAL OF INDUSTRIAL MANAGEMENT   SUMMER 2014 , Volume 9 , Number SPECIAL ISSUE ON KNOWLEDGE MANAGEMENT; Page(s) 91 To 105.
 
Paper: 

EVALUATION OF INVESTMENT IN KNOWLEDGE MANAGEMENT WITH MONTE CARLO FUZZY SIMULATION METHOD

 
 
Author(s):  TAROKH MOHAMMAD JAFAR, MOINZAD HOSSEIN*
 
* FACULTY OF SCIENCE AND RESEARCH, ISLAMIC AZAD UNIVERSITY
 
Abstract: 

Knowledge Management System (KMS) is based on information technology (IT), which is created to support and improve creation, storage/restoring, transfer, and knowledge application processes. It can provide an organization with competitive advantages (staffs productivity improvement, better quality of the final product, production and labor cost saving). It can be an important tool in organizational process. Managers are familiar with such advantages; however, due to budget, uncertainties, or economic risk, they still hesitate about making decisions on KMS investment. Cost-benefit analysis of KMS investment is a necessary tool for evaluating attractiveness of KMS. Traditional cost-benefit analysis, which is always used in KMS and other investment evaluation of Enterprise Information System (EIS), gives value of money to all the non-monetary and largely intangible parameters. Therefore, these models strongly tend to tangible costs and benefits. The present article presents fuzzy rule-based system for relating tangible and intangible benefits for KMS investment. The fizzy part discusses intangible parameters. In addition, Monte Carlo Simulation Method is used for considering economic uncertainty in calculating the expected Net Present Value (NPV). Monte Carlo Simulation is an appropriate method for estimating important factors of KMS in financial outcome by randomization of value of each unclear variable and calculation of target value of investment model. This issue is considered by managers to evaluate whether KMS investment is feasible. Therefore, it is necessary to calculate cost and benefit of KMS investment accurately.

 
Keyword(s): KNOWLEDGE MANAGEMENT SYSTEM (KMS), INFORMATION TECHNOLOGY (IT), COST-BENEFIT ANALYSIS, MONTE CARLO SIMULATION, NET PRESENT VALUE (NPV)
 
References: 
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