A fuzzy MCDM approach to evaluation of account receivable purchase

Factoring is a financial service enabling companies to sell their accounts receivables to a factor in exchange for cash. The market for factoring in Taiwan has been growing at substantial rates and most banking institutions are now actively exists. In this paper, we present a fuzzy multiple criteria decisionmaking (FMCDM) approach to evaluation of account receivable (A/R) purchase. By considering the evaluation of client, compliance with firm policy and evaluation of customer, the FMCDM approach is for the first time applied to investigate the A/R purchase for factoring industries in Taiwan. Example of three proposed alternatives is used to exemplify the approach. According to the achieved result, we find the difference between the factoring operation and traditional credit policy in the decision-making process. International Factoring in modern unpredictable global market could be difficult unless firms have taken appropriately evaluation strategies. We believe that our study provides an alternative for making critical decisions during selecting Factoring applicants.