Study on Factors of Business Decision in Thermal Power Enterprise Based on Principal Component Analysis

Abstract

Decision-making is the key to the development of enterprise. There are many factors of business decisions in thermal power enterprise, and they have different degree of importance. This paper describes the basic principles of principal component analysis. Based on the business characteristics of the thermal power combination, the paper selects seven relevant indicators from the perspective of their own costs and analyzes the factors of business decision in thermal power using principal component analysis. The results demonstrate that the cost factor of business decisions in thermal power enterprise is mainly controlled by the fixed costs, which is together determined by depreciation charges, staff salaries, maintenance costs, materials costs, etc. Secondly, it is controlled by the principal component that determined by the fuel cost. As to the degree of influence on individual factors, the greatest is the fuel costs.