Engineering Economist articles from June 2002

Engineering Economist archives from June 2002

"Real options--strategic planning under uncertainty": special issue -- part I. (Editorial).(Brief Article)
June 22, 2002... Decision-making under uncertainty is the common theme in this special issue. Unlike a typical probabilistic analysis or as it is commonly known as, "risk analysis", real options approach is gaining wide acceptance as a tool to make strategic...

Decision making under uncertainty--real options to the rescue?
June 22, 2002... INTRODUCTION Major corporations annually allocate substantial funds for a variety of investment projects. Most strategic investment projects, such as R&D, investment in information technology, and e-commerce projects, are typically not...

Real options--an introduction and an application to R&D valuation.
June 22, 2002... INTRODUCTION One of the main tasks fading managers is resource allocation. The allocation task is both a strategic and a financial task; neglecting the financial aspects of the decision might divert the manager from his ultimate goal of...

An options approach to valuing expansion flexibility in flexible manufacturing system investments.
June 22, 2002... INTRODUCTION Global competition in manufacturing environment has forced firms to increase the quality and responsiveness to customization, while lowering the costs. Manufacturing flexibility has become a key strategic objective of...

Valuing lease contracts under incomplete information: a real-options approach.
June 22, 2002... INTRODUCTION Leasing was used by the ancient Sumerians several thousand years B.C. Leasing is not confined only to the rental of real estate but includes any asset imaginable (satellites, trucks, power plants, etc.). Leasing appears as one...

The impact of volatility on firms holding growth options.
June 22, 2002... INTRODUCTION Managers and analysts have long been aware that strategic growth opportunities can be modeled as call options on future revenues, and that these "growth options" contribute to firm value. Indeed, for firms in the Internet,...