A data‐driven and cost‐oriented FMEA–MCDM approach to risk assessment and ranking in a fuzzy environment: A hydraulic pump factory case study

Abstract In today's highly competitive business environment, firms strive to maximize profitability by minimizing or eliminating disruptions and failures to maintain a competitive edge. This study focuses on evaluating risks in a hydraulic pump factory as a means to achieve sustainable growth. To accomplish this, a team of experts was formed to identify potential errors, utilizing a combination of risk priority number criteria weighted by Fuzzy Shannon's entropy and a fusion of multi‐criteria decision‐making and failure mode and effects analysis for evaluating and ranking failures. Moreover, the study emphasizes the importance of considering the interaction among risk assessment indicators, the inclusion of cost of failure, and modeling under fuzzy uncertainty circumstances, as they have a notable impact on the final ranking of failures to be processed for risk mitigation action planning. This research brings a new dimension to enhance the overall effectiveness of risk assessment by aggregation, as evidenced by a novel use of data classification in machine learning and correlation in statistics. The findings indicate that the aggregated ranking data series is best matched and most influenced by the weighted aggregated sum product assessment method, with the highest rate of recall and precision accomplished.