Calculation Formulas and Simulation Algorithms for Entropy of Function of LR Fuzzy Intervals

Abstract

Entropy has continuously arisen as one of the pivotal issues in optimization, mainly in portfolios, as an indicator of risk measurement. Aiming to simplify operations and extending applications of entropy in the field of LR fuzzy interval theory, this paper first proposes calculation formulas for the entropy of function via the inverse credibility distribution to directly calculate the entropy of linear function or simple nonlinear function of LR fuzzy intervals. Subsequently, to deal with the entropy of complicated nonlinear function, two novel simulation algorithms are separately designed by combining the uniform discretization process and the numerical integration process with the proposed calculation formulas. Compared to the existing simulation algorithms, the numerical results show that the advantage of the algorithms is well displayed in terms of stability, accuracy, and speed. On the whole, the simplified calculation formulas and the effective simulation algorithms proposed in this paper provide a powerful tool for the LR fuzzy interval theory, especially in entropy optimization.