Scoring of Credit Risk Using Integrated TOPSIS Combined AHP with Entropy

摘要

Estimation of credit risk plays a key part in business decision making. Based on system science and operation research, the integrated TOPSIS is designed to assess credit risk. Firstly, each financial element's weight can be computed by combining AHP with entropy in order to eliminate drawback of single method. Secondly, the principle and procedure of modified TOPSIS is described distinctly. Thirdly, the empirical example of modified method is demonstrated by using the corporation practical data, and the priority ranking of each one is illustrated. Finally, some preventive countermeasures against credit risk are proposed according to credit scoring. The research proves that the modified TOPSIS is superior to prototype model theoretically and practically.