Evaluation Method for Strategic Investments


Autoria(s): Alabi, Olabode
Data(s)

30/04/2010

Resumo

Real Options Analysis (ROA) has become a complimentary tool for engineering economics. It has become popular due to the limitations of conventional engineering valuation methods; specifically, the assumptions of uncertainty. Industry is seeking to quantify the value of engineering investments with uncertainty. One problem with conventional tools are that they may assume that cash flows are certain, therefore minimizing the possibility of the uncertainty of future values. Real options analysis provides a solution to this problem, but has been used sparingly by practitioners. This paper seeks to provide a new model, referred to as the Beta Distribution Real Options Pricing Model (BDROP), which addresses these limitations and can be easily used by practitioners. The positive attributes of this new model include unconstrained market assumptions, robust representation of the underlying asset‟s uncertainty, and an uncomplicated methodology. This research demonstrates the use of the model to evaluate the use of automation for inventory control.

Formato

application/pdf

Identificador

http://digitalcommons.unl.edu/imsediss/3

http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1005&context=imsediss

Publicador

DigitalCommons@University of Nebraska - Lincoln

Fonte

Industrial and Management Systems Engineering -- Dissertations and Student Research

Palavras-Chave #Valuation #Real #Options #Analysis #Black-Scholes #Tecniques #Beta Distribution #RFID #Thesis #Net Present Value #Industrial Engineering #Operations Research, Systems Engineering and Industrial Engineering
Tipo

text