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International Journal of Fuzzy Systems, Vol. 4, No. 4, December 2002 ou Fuzzy Factor Analysis for Selecting Service Quality Factors -A Case of the Service Quality of City Bus Service Gwo-Hshiung Tzeng, William Jen, and Kai-Chieh Hu Abstract Service quality is basically determined by subjective perceptions and feelings towards each of the evaluated attributes, so the results of evaluation are usually different according to individual habits and preferences. Thus, it would be more reasonable to deal with this data by applied fuzzy theory, while the vagueness and uncertainty of individual perception should be considered in the responsive performance data of service quality. As a result, the fuzzy data is calculated with the fuzzy computation proposed by Nakamori et al. in 1997. The purpose of this study is to conduct fuzzy factor analysis for service quality, so as to clarify the relationship between each of the attribute factors, as well as the characteristics of the factors evaluated. First, this study reviews the materials and methods of factor analysis, then selects a proper illustration according to factors of service quality so as to explain the operation of factor analysis for fuzzy data. The ‘empirical case takes the service quality of a city bus system as an example in order to illustrate the feasibility and practicality of this method. In the results from factor analysis and fuzzy factor analysis, four factors of city bus service quality of perception by the passengers are extracted, “interaction with passengers,” “tangible service equipment”, “safety and convenience of bus riding,” and “operation of network systems”. It is found from this study that fuzzy factor analysis is more suitable for human behavior, more effective in practical problems and can provide more flexible factor loading for researchers. Thus, fuzzy factor analysis can render classification of service quality factor more reasonable and acceptable than that of the conventional method. Keywords: fuczy data, factor analysis, service quality, subjective perceptions, city bus service. Conesponding Author: Professor Gwo-Hishiung Tzeng i with Institute of ‘Technology Manogerent, 1001, ‘Tefisuch, Ré, Hsinchu 300, Taiwan, Fax: +886-3-5726749; Emil: ghizeng@conet.edutw 1. Introduction In selecting the factors of service quality, factor analysis is the method most often employed. Its most, important mechanism is to cut down the many initial relative observation factors into a few mutually independent factors, and at the same time maintaining, excellent ability to conduct justification for the original problem, However, since service quality is a subjective perception, with individual perceptions for each of the attributes evaluated, the evaluation is greatly affected by individual preference in response to the data. Considering the vagueness and uncertainty of subjective feelings, fuzzy justification is statistically more suitable to handle such iarge variations. Thus, the purpose of this, study is to use fuzzy computation of fuzzy data to conduct fuzzy facto analysis for service quality, and thus to evaluate the relationship between each of the attribute factors and the characteristics of the factors evaluated. ‘Nakamori et al. (1997 (11]) proposed the notion of a factor space model for fuzzy data and developed fuzzy factor analysis. However, since the use of fuzzy correlation coefficients and fuzzy eigenvalues cannot, meet the requirements of the research data model, this, study proposes using fuzzy operations to determine the, fuzzy correlation coefficient in direct terms. After this, the resolution for fuzzy eigenvalue by Nakamori et al. is, modified, and fuzzy factor snalysis is employed to evaluate service quality. This study first reviews the ‘materials and methods of factor analysis, using the factor selection for city bus service quality as an illustration. We then explain the operation of factor analysis of fuzzy Gata, Because the service quality of city bus service is derived from the subjective perception of passengers and is thus affected by individual preferences, the data is, inherently vague, and is more appropriate to be analyzed by a fuzzy method. In the empirical example of this, research, in order to show the feasibility and practicality of the method, a questionnaire for the service quality attributes based on Parasuraman et al. (1985°[12)) is ‘employed. The results are initially processed by anelysis. with conventional factor analysis after field investigation. Then, passenger perception regarding the performance data of service quality is quantified with © 2002 CFSAT aIOUL sIskTeUL IojoRy AZZNJ SYeU 0} JOpO Ul sonfeAUDSIO AZZN} pue syUOLOYJI09. 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