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Identification of Flexible Design Opportunities - Move up |
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Designing Capital-Intensive Systems with Architectural and Operational Flexibility Using a Screening Model Jijun Lin, Olivier de Weck, Richard de Neufville, Bob Robinson, and David MacGowan Complex 2009, 1st. International Conference on Complex Systems, Shanghai, Feb. A Methodology for Identifying Flexible Design Opportunities Jennifer Wilds, Master of Science Thesis, Engineering Systems Division, MIT, September 2008 Identifying Real Options to Improve the Design of Engineering Systems Richard de Neufville, Olivier de Weck, Jijun Lin and Stefan Scholtes Chapter in "Real Options in Engineering Design, Operations and Management," H. Nembhard and Mehmet Aktan, eds., CRC Press, 2009. Describes ongoing research focusing on improving the overall performance of technological projects through design of flexibility. Positions current research midway between standard engineering practice - which does not incorporate systematically flexibility in design - and financial real options - which does not deal with design issues. A case study in the oil industry is provided. Engineering Systems Matrix: An Organizing Framework for Modeling Large-Scale Complex Systems (text) (figures) Jason Bartolomei, Daniel Hastings, Richard de Neufville, Donna Rhodes Journal of Systems Engineering, 2011 Qualitative Knowledge Construction for Engineering Systems: Extending the Design Structure Matrix Methodology in Scope and Perspective Jason Bartolomei, Doctoral Dissertation, Engineering Systems Division, MIT, June, 2007 Introduction of the Engineering Systems Matrix (ESM), a new modeling framework based on Design Structure Matrices to represent engineering systems on an end-to-end system-level basis, and the Qualitative Knowledge Construction methodology, a Bayesian-type approach integrating qualitative and quantitative methods for coding engineering systems into an ESM. Analysis and Applications of Design Structure Matrix, Domain Mapping Matrix, and Engineering System Matrix Framework J. Bartolomei, M. Cokus, J. Dahlgren, R. de Neufville, R. Maldonado, and J. Wilds June 2007 Describes and discusses applications of three different, related system-level modeling frameworks: Design Structure Matrix, Domain Mapping Matrix, and Engineering Systems Matrix. Identification of Real Options "In" Projects Tao Wang and Richard de Neufville, 16th. Annual International Symposium of the International Council on Systems Engineering (INCOSE) Orlando, July 2006. Prize for Best Paper at INCOSE Conference Provides an approach to identify sources of flexibility "in" engineering systems that are a priori undefined, complex, and interdependent. The method uses a low-fidelity screening model and simulations to identify flexibility "in" the system. The method is applied to a hydro power system development project in China. Platform Identification Using Design Structure Matrices Konstantinos Kalligeros, Olivier de Weck, Richard de Neufville and Adrrian Luckins 16th. Annual International Symposium of the International Council on Systems Engineering (INCOSE) Orlando, July 2006. Introduces a novel algorithm based on sensitivity Design Structure Matrix (sDSM) to identify qualitatively platform components among variants within a family of systems. Identifying platform components lead to identification of where flexibility should be inserted to switch between variants. A case example in the automotive industry is provided. Screening for Real Options "in" Engineering Systems: A Step towards Flexible Weapons Development Jason Bartolomei, Richard de Neufville, Daniel Hastings and Donna Rhodes, 16th. Annual International Symposium of the International Council on Systems Engineering (INCOSE) Orlando, July 2006. Provides an end-to-end socio-technical representation of an engineering system based on Design Structure Matrix to screen for flexibility "in" the system. Review the literature on existing methodologies to represent engineering systems. Introduces application to a Miniature Air Vehicle used by the U.S. military. Design of Engineering Systems Under Uncertainty via Real Options and Heuristic Optimization Rania Hassan and Richard de Neufville, Real Options Conference, New York, June 2006. An approach based on heuristic optimization to design and value a flexible engineering system operating under uncertainty. The approach is applied to the development of an offshore oil pipeline network. Real Options in Systems Design: A Methodological Compromise and its Implications , Konstantinos Kalligeros and Richard de Neufville, Real Options Conference, New York, June 2006. A methodology based on simulations for valuing certain classes of engineering systems, with focus on design rather that proper economic valuation of options. The method sacrifices some technical rigor to be compatible with evaluation practice in engineering organizations. Platforms and Flexibility in Large-Scale Engineering Systems Konstantinos Kalligeros, Doctoral Dissertation, Engineering Systems Division, MIT, May 2006 A framework incorporating two methods for 1) screening engineering systems for flexibility "in" systems, called Invariant Design Rule, which relies on standardization and Design Structure Matrix, and 2) valuing real options in an engineering context based on simulations. The framework is applied to a case in the oil platform development industry. Identification of Real Options "In" Projects Tao Wang and Richard de Neufville, Conference on Systems Engineering Research (CSER), Los Angeles, CA, April 2006 Real Options "In" Projects and Systems Design -- Identification of Options and Solutions for Path Dependency Tao Wang, Doctoral Dissertation, Engineering Systems Division, MIT, May, 2005 Proposes a two-stage integrated process to identify and value options "in" engineering systems, The first stage comprises an optimization-based low-fidelity screening model to identify potential sources of flexibility. The second stage develops a path-dependent mixed-integer programming approach to value real options. It is applied to a river basin and satellite communication systems. Real Options "in" Projects Tao Wang and Richard de Neufville, Real Options Conference, Paris, 2005 Discusses, compares, and contrast real options "on" project, related to managerial flexibility, vs. "in" projects, which require technical inputs from engineers and designers. Discusses the limitations of existing real options valuation methods when used in an engineering context. Building Real Options into Physical Systems with Stochastic Mixed-Integer Programming Richard de Neufville and Tao Wang, 8th Annual International Conference on Real Options, Montreal, Canada, June 2004 Proposes a two-stage integrated process to identify and value options "in" engineering systems, The first stage comprises an optimization-based low-fidelity screening model to identify potential sources of flexibility. The second stage develops a path-dependent mixed-integer programming approach to value real options. It is applied to a water resource planning problem. Uncertainty Management - Move up Risk Management and Governance for PFI Project: Technology Policy Lessons from the Case of Japan Takuji Matsumoto, Master of Science Thesis, Technology and Policy, MIT, May 2012 Improving the Risk Identification Process for a Global Supply Chain, Amil Mody, Master's Thesis, MBA and Engineering Systems, Leaders in Global Operations Program, May 2012 Governance Mechanisms for Infrastructure Public-Private Partnerships: Focus on India, Arjun Gupta, Master's Thesis, MIT Technology and Policy Program, August 2010 |
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APPLICATIONS - Move up ----------------------------------------------------------------------------------------------------------------------------------------
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Aerospace - Move up The European Satellite Navigation Program: Policy Analysis and Recommendations for the Future, Laura Escudero San Jose, Master's Thesis, MIT Technology and Policy Program, November 2010 A Life-Cycle Flexibility Framework for Designing, Evaluating and Managing "Complex" Real Options: Case Studies in Urban Transportation and Aircraft Systems Joshua McConnell, Doctoral Dissertation, Engineering Systems Division, MIT, May 2007 Introduces the Life-Cycle Flexibility (LCF) framework for evaluating "complex" real options, which accounts for design, evaluation, and management/political phases of real options development and exercise. The LCF integrates systems dynamics and real options methods, and is applied to aircraft and transportation systems. Design of Engineering Systems Under Uncertainty via Real Options and Heuristic Optimization Rania Hassan and Richard de Neufville, Real Options Conference, New York, June 2006. An approach based on heuristic optimization to design and value a flexible engineering system operating under uncertainty. The approach is applied to the development of an offshore oil pipeline network. Real Options "In" Projects and Systems Design -- Identification of Options and Solutions for Path Dependency Tao Wang, Doctoral Dissertation, Engineering Systems Division, MIT, May, 2005 Proposes a two-stage integrated process to identify and value options "in" engineering systems, The first stage comprises an optimization-based low-fidelity screening model to identify potential sources of flexibility. The second stage develops a path-dependent mixed-integer programming approach to value real options. It is applied to a river basin and satellite communication systems. Value-at-Risk Analysis for Real Options in Complex Engineered Systems Rania Hassan, Richard de Neufville, Olivier de Weck, Daniel Hastings and D. McKinnon Systems, Man and Cybernetics, 2005 IEEE International Conference on Large Scale Infrastructures, Hawaii, 10-12 October in Volume 4, pp. 3697-3704, Digital Object Identifier 10.1109/ICSMC.2005.1571721 Demonstration of the simulation-based real options valuation method applied to a flexible satellite-fleet architecture. Staged Deployment of Communication Satellite Constellation in Low Earth Orbit Olivier de Weck, Richard de Neufville and Matthieu Chaize Jour. of Aerospace Computing, Information, and Communications, Vol. 1, No. 3, Mar., pp. 119-131, 2004 Application of real options analysis to the design of a reconfigurable satellite constellation, to be deployed in stages. The analysis shows that a flexible design provides economic benefits that increase with demand uncertainty level (journal version). Enhancing the Economics of Communications Satellites via Orbital Reconfigurations and Staged Deployment Olivier de Weck, Richard de Neufville and Matthieu Chaize AIAA - 2003 - 6317, presented at AIAA Space Conference, Long Beach, CA, Sept. 2003 Application of real options analysis to the design of a reconfigurable satellite constellation, to be deployed in stages. The analysis shows that a flexible design provides economic benefits that increase with demand uncertainty level (proceedings version). |
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Airport Design - Move up Building Airport Systems for the Next Generation Richard de Neufville, The Bridge, Journal of the National Academy of Engineering, Special Issue on Transportation Infrastructure, Summer 2008, pp.41-46 Discusses current problems and issues with airport design throughout the world. Outlines the need to recognize uncertainty in airport design and operations, and the need to incorporate long-term strategic thinking and design for flexibility. Using Design Flexibility and Real Options to Reduce Risk in Private Finance Initiatives: The Case of Japan Dai Ohama, Master of Science Thesis, Technology and Policy, MIT, May 2008 Spreadsheets for Analysis: Case of Tokyo Bay Aqua-line Case of Tokyo/Haneda Airport Expansion Presents a methodology exploiting flexibility in design of large-scale infrastructure projects in the context of Private Finance Initiative - a form of public-private partnership. The methodology helps managers handle uncertainty, model and evaluate the project, and reduce overall risk. It is applied to the Tokyo airport and Aqua-Line tunnel development projects. Tackling Uncertainty in Airport Design: A Real Options Approach Richard-Duane Chambers, Master of Science Thesis, Technology and Policy, MIT, September 2007 Spreadsheets for running analyses for Airport Expansion Exercises: Readme Runway Default; Runway; Terminal Expansion Default Terminal Expansion 1, 2, 3, 4, 5, 6, 7, 8, 9 Applies real options methods to value the financial benefits from flexible airport runway and terminal expansion designs. Models are available for preliminary evaluation of various airport development strategies, especially in an educational context. Development of a second major aiport outside Lisbon in Portugal provides the main case study. |
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Automotive - Move up System Architecture Systems Under Uncertainty: A Case Study on Automotive Battery System Design Matthew Renzi, Master of Science Thesis, System Design and Management, MIT, May 2012 A Screening Model to Explore Planning Decisions in Automotive Manufacturing Systems Under Demand Uncertainty Yingxia Yang, Doctoral Dissertation, MIT Engineering Systems Division, May 2009 Platform Identification Using Design Structure Matrices Konstantinos Kalligeros, Olivier de Weck, Richard de Neufville and Adrrian Luckins 16th. Annual International Symposium of the International Council on Systems Engineering (INCOSE) Orlando, July 2006. Introduces a novel algorithm based on sensitivity Design Structure Matrix (sDSM) to identify qualitatively platform components among variants within a family of systems. Identifying platform components lead to identification of where flexibility should be inserted to switch between variants. A case example in the automotive industry is provided. Hybrid Real Options Valuation of Risky Product Development Projects Richard de Neufville and James Neely - International Journal of Technology, Policy and Management, Vol.1, No.1, pp.29-46, Jan. 2001 Presents of a hybrid real options valuation method combining decision and options analysis. Illustrates application of the method to a portfolio of technological developments of a major automobile company. Defining Markets for New Materials -- Developing a Utility Methodology with Case Application Richard de Neufville, Christophe Mangin, Frank Field and Joel Clark - Resources Policy, Vol. 21, No.3, pp.169-178, September 1995 An engineering methodology to identify profitable market segments for use of new materials. The method has three parts: 1) measure of company preference for particular material use 2) market segment identification 3) measure of the premium market segments are willing to pay for a product made of new material. The method is applied to a case study in the automobile industry. |
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Defense - Move up Screening for Real Options "in" Engineering Systems: A Step towards Flexible Weapons Development Jason Bartolomei, Richard de Neufville, Daniel Hastings and Donna Rhodes, 16th. Annual International Symposium of the International Council on Systems Engineering (INCOSE) Orlando, July 2006. Provides an end-to-end socio-technical representation of an engineering system based on Design Structure Matrix to screen for flexibility "in" the system. Review the literature on existing methodologies to represent engineering systems. Introduces application to a Miniature Air Vehicle used by the U.S. military. |
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Energy - Move up Improving the Lifecycle Performance of Engineering Projects with Flexible Strategies: Example of On-Shore LNG Production Design, M.-A. Cardin, M. Bourani, R. de Neufville, Systems Engineering, Vol. 18, No.3 2015 Improving the Life Cycle Performance of Engineering Projects with Flexible Strategies, A Study about Onshore LNG Production Design, M.-A. Cardin, M. Bourani, R. de Neufville Quantifying the Value of Flexibility in Design and Management of Onshore LNG Production System, M.-A. Cardin, M. Bourani, Y. Deng, R. de Neufville, W. S. Cheng, R. Atapattu, X. Sheng, and K.S. Foo, Incose conference, June 2014 Quantifying the Value of Flexibility in Oil and Gas Projects: A Cases Study of Centralized vs. Decentralized LNG Production System, M-A. Cardin, M. Bourani, R. de Neufville, W.S. Chong, R. Atapattu, X. Sheng, and K.S. Foo Keppel Offshore Marine Technology Review, 2013. Incorporating Endogenous Demand Dynamics into Long-Term Capacity Expansion Power System Models for Developing Countries Rhonda Jordan, Doctoral Dissertation, MIT Engineering Systems Division, September 2013 Enhancing the Value of Oilfield Development with Flexible Subsea Tiebacks J. Lin, O. de Weck, R. de Neufville, and H. Yue J. of Petroleum Science and Engineering, Vol. 102, February 2013, pp. 73-83. Valuing Flexibility in Product Platforms: an Analytical Framework M.Harper, Master of Science thesis, Engineering and Management, M IT May 2010 Minimizing the Cost of Innovative Nuclear Technology Through Flexibility: The Case of a Demonstration Accelerator-Driven Subcritical Reactor Park Michel-Alexandre Cardin, Steven Steer, William Nuttall, Geoffrey Parks. Leonardo Goncalves and Richard de Neufville Electricity Policy Working Group, Working Paper, University of Cambridge, UK The paper shows how flexibility in design can reduce the expected Levelised Cost of Generating Electricity (LCOE) -- in this about by about 12% -- for this form of innovative nuclear technology. Integrated Method for Designing Valuable Flexibility in Oil Development Projects Abisoye Babajide, Richard de Neufville and Michel-Alexandre Cardin Society of Petroleum Engineers (SPE) Journal of Projects, Facililties & Construction, Vol. 4, no. 2, June 2009. http://www.spe.org/ejournals/jsp/journalapp.jsp?jid=EFC&pageType=Issue Exploring Flexible Strategies in Engineering Systems Using Screening Models: Applications to Offshore Petroleum Projects Jijun Lin, Doctoral Dissertation, MIT Engineering Systems Division, December 2008 Designing Capital-Intensive Systems with Architectural and Operational Flexibility Using a Screening Model Jijun Lin, Olivier de Weck, Richard de Neufville, Bob Robinson, and David MacGowan Complex 2009, 1st. International Conference on Complex Systems, Shanghai, Feb. Real Options for a Wind Farm in Wapakoneta, Ohio: Incorporating Uncertainty into Economic Feasibility Studies for Community Wind Katherine Dykes and Richard de Neufville, World Wind Energy Conference of 2008, Kingston, Ontario, Canada, June 24-26, 2008 Slides [ZEW conference, Germany, Oct. 2008] Uses a hybrid Monte Carlo - decision analysis method and lattice analysis to evaluate optimal decision-making for investment in a small community wind farm operating under uncertainty. The two options are a call, or phased project expansion, and the a put, or abandonment option. The paper contrasts and compares results obtained with the two analytical tools. Real Options Analysis as a Decision Tool in Oil Field Development , Abisoye Babajide, Master of Science Thesis, System Design and Management, MIT, February 2007 Applies decision analysis to value an option to expand production capacity as uncertainty unfolds in market price and oil reserves for an offshore oil development project. Proposed Methodology for Valueing Start-Up or Research Companies Nicola De Blasio, Raffaella Turatto and Richard de Neufville, Nuova Energia, Milan, No. 2, pp. 34 -37, 2007 http://www.nuova-energia.com/index.php?option=com_content&task=view&id=533&Itemid=113 Simple process to value the acquisition of start-ups or research companies by an energy company. Design of Engineering Systems Under Uncertainty via Real Options and Heuristic Optimization Rania Hassan and Richard de Neufville, Real Options Conference, New York, June 2006. An approach based on heuristic optimization to design and value a flexible engineering system operating under uncertainty. The approach is applied to the development of an offshore oil pipeline network. Platforms and Flexibility in Large-Scale Engineering Systems Konstantinos Kalligeros, Doctoral Dissertation, Engineering Systems Division, MIT, May 2006 A framework incorporating two methods for 1) screening engineering systems for flexibility "in" systems, called Invariant Design Rule, which relies on standardization and Design Structure Matrix, and 2) valuing real options in an engineering context based on simulations. The framework is applied to a case in the oil platform development industry. Nuclear Power: A Hedge against Uncertain Gas and Carbon Prices? Fabien Roques, William Nuttall, David Newbery, Richard de Neufville and Stephen Connors, Energy Journal, Number 4, Volume 27, 2006. This paper and two below study the possibility, for merchant generators in a European liberalized electricity market, of keeping the option open between nuclear and gas technologies. Stochastic optimization are used to estimate the option value. Marches Electriques: Securite Energetique et Diversification Technologique: Le Nucleaire comme Couverture face aux Risques de Prix du Gaz et du Carbone Fabien Roques, William Nuttall, David Newbery, and Richard de Neufville, La Revue de l'Energie, Number 568, Nov.-Dec., pp.373-385, 2005. Nuclear Power: A Hedge against Uncertain Gas and Carbon Prices? Fabien Roques, William Nuttall, David Newbery, and Richard de Neufville Cambridge University, Electricity Policy Research Group Working paper EPRG 05/10, 2005 Real Options Approach to Capacity Planning Under Uncertainty Geetanjali Mittal, Master of Science Thesis, Civil and Environmental Engineeringm, MIT, February, 2004 Highlights the effectiveness of real options analysis in capacity planning decisions for engineering projects under uncertainty, in particular in planning flexible hydropower capacity. |
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Healthcare - Move up Real Options Analysis of Flexibility in a Hospital Emergency Department Expansion Project, A Systems Approach Luis Maseda, Master of Science Thesis, System Design and Management, MIT, May 2008 Spreadsheet for Analysis Identifies, characterizes, and quantifies the parameters to consider in emergency department expansion projects. Presents useful modeling techniques to drive investment decisions in flexibility with the goal of providing better service level to patient population. The case is inspired from a hospital in the Greater Boston area. Flexibility in Hospital Infrastructure Design Richard de Neufville, Yun S. Lee, and Stefan Scholtes IEEE Conference on Instructure Systems, Rotterdam, 10-12 Nov., 2008 Demonstrates the value of flexibility in hospital design through case study of a major UK teaching hospital developed over the last 80 years. Lays out principles for designers to make economic case for flexible hospital infrastructure. Presents arguments for why Private Finance Initiative might inhibit design and development of flexible infrastructures in the UK. Using Flexibility to Improve Value-for-Money in Hospital Inferastructure Investments Richard de Neufville, Yun S. Lee and Stefan Scholtes Symposium on Refining Health Care Infrastructure, 3-4 April 2008, Tanaka Business School, Imperial College London A somewhat different version of the above paper, used for oral presentation. Flexible Design in Public Private Partnerships: A PFI Case Study in the National Health Service Yun Shin Lee, Judge Business School, University of Cambridge, June 2007. Master's Dissertation supervised by Prof. Stefan Scholtes Proposes managerial ways of considering flexibility systematically into Private Finance Initiative contracts at the beginning of the project. The paper introduces OUF (Operational, Uncertainty, Flexibility) matrices to consider a sufficient number of scenarios for flexibility. The model is applied to a case study in National Health Service in the UK. |
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Management - Move up Forest Fire Management in Portugal: Developing Systems Insights through Models of Social and Physical Dynamics Ross Collins, Master of Science Thesis, Technology and Policy, MIT, May 2012 Using Design Flexibility and Real Options to Reduce Risk in Private Finance Initiatives: The Case of Japan Dai Ohama, Master of Science Thesis, Technology and Policy, MIT, May 2008 Spreadsheets for Analysis: Case of Tokyo Bay Aqua-line Case of Tokyo/Haneda Airport Expansion Presents a methodology exploiting flexibility in design of large-scale infrastructure projects in the context of Private Finance Initiative - a form of public-private partnership. The methodology helps managers handle uncertainty, model and evaluate the project, and reduce overall risk. It is applied to the Tokyo airport and Aqua-Line tunnel development projects. Hybrid Lattice and Decision Analysis of Real Options: Application to a Supply-Chain Strategy Nestor Quispez-Asin, Master of Science Thesis, Engineering Systems Division, MIT, February 2008 Presentation of a hybrid valuation method for real options combining lattice and decision analyses. The new valuation method benefits from advantages and reduces drawbacks from both methods. It is applied to a case study in supply-chain management. Proposed Methodology for Valueing Start-Up or Research Companies Nicola De Blasio, Raffaella Turatto and Richard de Neufville, Nuova Energia, Milan, No. 2, pp. 34 -37, 2007 http://www.nuova-energia.com/index.php?option=com_content&task=view&id=533&Itemid=113 Simple process to value the acquisition of start-ups or research companies by an energy company. A Practical Method for Incorporating Real Options Analysis into US Federal Benefit-Cost Analysis Procedures Darren Rivey, Master of Science Thesis, System Design and Management, MIT, January 2007 Identifies how real options thinking might complement current Benefit-Cost Analysis in use by the Office of Management and Budget in circular A-94. The proposed framework relies on Monte Carlo simulations in simple spreadsheet, complements existing practice, and should easily integrate with current tools, procedures, staff, and resources. Maximizing Value from Large Projects: Implementing Flexibility in Public-Private Partnerships , Richard de Neufville and Stefan Scholtes, Briefing Paper, May 2006 Describes how flexibility can be used to deal with future uncertainty in large-scale project design and operations. Presents four major processes that determine planning, design, and delivery of a flexible project. An options view of designing capacity: an introductory tutorial Stefan Scholtes, 2004 Simple example in capacity planning for an infrastructure demonstrating economic benefits of flexibility. Managing Risks of Supply-Chain Disruptions: Dual Sourcing as a Real Option Sophie Pochard, Master of Science Thesis, Technology and Policy, MIT, August 2003 Focuses on how firms can prepare against disruption in their supply-chain and use real options thinking to value dual sourcing strategies. A model is developed to value the benefits of dual sourcing. It defines particular circumstances that justify a second supplier. Dynamic Strategic Planning for Technology Policy Richard de Neufville - International Journal of Technology Management, Vol.19, No.3/4/5, pp.225-245, 2000 Describes the principles of Dynamic Strategic Planning (DSP) for creating rational policies for large-scale engineering project development. Indicates specific methods for carrying out DSP principles, and applies them to a case study of low-emission policy for automobiles in the United States. Technology Investment Advisor: An Options-Based Approach to Technology Strategy William Rouse, Charles Howard, William Carns and E. James Prendergast Information - Knowledge - Systems Management 2 (2000) pp 63-81 IOS Press Presents how R&D efforts can provide value as an option for achieving future business results, rather than be considered as low return investments due to discounting of distant benefits. Develops and illustrates the approach in terms of integrated models for options pricing, market/technology maturity, production, and learning scenarios. A Dynamic Technology Strategy for Xerox to Respond to the Threat of High-Tech Commoditization Richard de Neufville and Ali Pirnar - International Journal of Technology Management, Vol.18, No.1/2, pp.73-92, 1999 Shows how Xerox can make strategic decisions to move into digital technology to respond to the threat of high-tech commoditization in copiers. Shows that agressive moves, although having higher variance and risk, provide higher expected outcomes under extreme commoditization. |
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Mining - Move up A Process to Improve Expected Value of Mining Operations Michel-Alexandre Cardin, Richard de Neufville, Vassilios Kazakidis, Mining Technology, Vol. 117, No. 2, pp. 65-70, 2008 An improved, computationally efficient appraisal process that recognizes the increased expected value of mining operations attributable to intelligent management response to changing operating conditions and market prices. Recognizes the value of flexibility in the exploitation of deposits, and thus leads to better selection of properties for finance and development. Planning for Flexibility in Underground Mine Production Systems Vassilios Kazakidis and M. Scoble, Mining Engineering, Amer. Inst. Min. and Metall. Pet. Eng., SME, 55(8), pp. 33-39. 2003. Considers how flexibility can be evaluated and integrated into proactive mine planning using the concept of flexibility index. The flexibility index indicates how much value is added by a particular option compared to the NPV obtained with an inflexible design. Product Design Move up System Architecture under Uncertainty: A Case Study on Automotive Battery System Design, M. Renzi, Master's Thesis in Engineering and Management, May 2012 Valuing Flexibility in Product Platforms: an Analytical Framework M.Harper, M IT Master's thesis in Engineering and Management, May 2010 |
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Public Infrastructure - Move up Embracing the Future of Land Transportation: Valuing Flexibility in Design and Technology Options for Autonomous Vehicle Developments in Singapore, Huiling Eng, Master of Science Thesis, MIT Engineering and Management, February 2017. Using real option methods as a tool to determine optimal building work programs, Miriam Esders, Bryan Adey, and Nam Lethanh, Structure and Infrastructure Engineering, Vol 12, No. 11, pp 1395-1410, DOI: 10.1080/15732479.2015.1131994 A Methodology to Ensure the Consideration of Flexibility and Robustness in the Selection of Facility Renewal Projects, Miriam Esders, Nicola Della Morte, and Bryan Adey, International J of Architecture, Engineering and Construction, Vol 4, No 3, September 2015, pp 126-139. Material Diversification in Pavement Managements: A Technique to Proactively Deal with an Uncertain Future, Omar Swei, Doctoral Dissertation, MIT Civil and Environmental Engineering, September 2016 Negotiated Collaboration: a Study in Flexible Infrastructure Design, Vivek Sakhrani, Doctoral Dissertation, MIT Engineering Systems Division, Cambridge, MA, 2015 Prize for Best Thesis Governance Mechanisms for Infrastructure Public-Private Partnerships: Focus on India, Arjun Gupta, Master's Thesis, MIT Technology and Policy Program, August 2010 Real Options "In" Projects and Systems Design -- Identification of Options and Solutions for Path Dependency Tao Wang, Doctoral Dissertation, Engineering Systems Division, MIT, May, 2005 Proposes a two-stage integrated process to identify and value options "in" engineering systems, The first stage comprises an optimization-based low-fidelity screening model to identify potential sources of flexibility. The second stage develops a path-dependent mixed-integer programming approach to value real options. It is applied to a river basin and satellite communication systems. Building Real Options into Physical Systems with Stochastic Mixed-Integer Programming Richard de Neufville and Tao Wang, 8th Annual International Conference on Real Options, Montreal, Canada, June 2004 Proposes a two-stage integrated process to identify and value options "in" engineering systems, The first stage comprises an optimization-based low-fidelity screening model to identify potential sources of flexibility. The second stage develops a path-dependent mixed-integer programming approach to value real options. It is applied to a water resource planning problem. Analysis of Real Options in Hydropower Construction Projects: A Case Study in China Tao Wang, MIT, August 2003 Applies real options analysis to value an investment deferral option on the Yalongjiang River Basin development project in China. Uncertainty in electricity price is modeled using Geometric Brownian. The paper recognizes that options analysis overcomes inadequacies of traditional NPV valuation. Valuing Flexibility in Infrastructure Developments: The Bogota Water Supply Expansion Plan Natalia Ramirez, Master of Science Thesis, Technology and Policy, MIT, May 2002 Prize for Best Thesis in Technology Policy Implements traditional NPV, decision analysis, and real options analysis to value an expansion option on the water supply system in Bogota, Colombia. Compares and contrasts the valuation results from each methods, and evaluates the techniques based on policy considerations such as practicality and ease of communication to decision-makers. |
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Real Estate - Move up Flexibility In Ballpark Design, Kyle Ressler, Master of Science Thesis, System Design and Management Program, MIT, May 2014. Beyond DCF Analysis in Real Estate Financial Modeling: Probabilistic Evaluation of Real Estate Ventures Keith Leung, Master of Science Thesis, Program in Real Estate Development, MIT, February, 2014 Apply Options-thinking in Long Term Infrastructure Investment: the case of commercial real estate Na Zhang, Master of Science Thesis, Technology and Policy, MIT, May 2010 Vertical phasing as a corporate real estate strategy and design option Anthony Guma, Jason Pearson, Kate Wittels, Richard de Neufville, and David Geltner, Journal of Corporate Real Estate, Vol. 11, no. 3, pp. 144-157, 2009. Real Options in Action: Vertical Phasing in Commercial Real Estate Development, Jason Pearson and Kate Wittels, MIT Masters in Real Estate Development, August 2008 A Real Options Analysis of a Vertically Expandible Real Estate Development, Anthony Guma, MIT Masters in Real Estate Development, August 2008 Prize for Best Thesis in Real Estate Development Spreadsheet for Analysis A Streamlined Real Options Model for Real Estate Development, Baabak Barman and Kathryn Nash, MIT Masters in Real Estate Development, September 2007 Presents a hybrid real options valuation method based on Monte Carlo simulations and traditional lattice analysis to value flexible real estate projects. Presents interview results with experienced developers as to why traditional real options method is not prevalent in this industry. Applies hybrid method to value investment deferral option on a two-phase development project. A Comparative Study of Real Options Valuation Methods: Economics-Based Approach vs. Engineering-Based Approach Shuichi Masunaga, MIT Masters in Real Estate Development, September 2007 Addresses the issue as to why traditional real options analysis is not prevalent in the real estate industry. Compares valuation results from traditional lattice-based and simulations-based real options analyses to the development of a flexible real estate project. Towards a New Real Estate: Innovative Financing for a Better Built Environment Matthew Lister, MIT Masters in Real Estate Development, September 2007 Describes how the real estate industry has evolved over the last century to develop places designed for compromise rather than enduring value. Posits that the industry is moving towards a New Real Estate that facilitates creation of places of enduring value, in particular through walkable mixed use urbanism. Examines the role of innovative financing concepts such as real options analysis in this evolving industry. Facing Reality: Design and Management of Flexible Engineering Systems Michel-Alexandre Cardin, Master of Science Thesis, Technology and Policy, MIT, May, 2007 A computationally efficient method to explore the design space and value flexible engineering systems. The method incorporates a One-Factor-At-a-Time algorithm based on statistical experiment design to explore the design space, and Monte Carlo simulation for valuation. It is applied to cases studies of parking garage and real estate development. Flexibility in Building Design: A Real Options Approach and Valuation Methodology to Address Risk Lara Greden, Doctoral Dissertation, Building Technology, MIT, April 2005 Develops an approach to flexible buildings operating under market rent and climate uncertainty. The research investigates two sources of flexibility in the building industry: 1) ability to change use of space, and 2) ability to switch from natural ventilation to mechanical cooling. It demonstrates the value added by flexible design using real options analysis. Management of Technology Investment Risk with Real Options-Based Design: A case study of an innovative building technology Lara Greden, Richard de Neufville and Leon Glicksman Real Options Conference, Paris, 2005 Demonstrates how embedding flexibiilty can avoid downside risks and benefit from upside opportunities in building design. Applies simulation-based real options analysis to value naturally ventilated building design with option to install mechanical cooling depending on uncertain market value. |
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Transportation - Move up Measuring the Capacity of a Port System: A Case Study on a Southeast Asian Port Jason Salminen, Master of Engineering in Logistics Thesis, June 2013 Value of Options in Airport Expansion F. Morgado, S. Nagaralo, R. Macario, and R. de Neufville European Regional Science Association, Barcelona, Spain, Sept 2011 Using Design Flexibility and Real Options to Reduce Risk in Private Finance Initiatives: The Case of Japan Dai Ohama, Master of Science Thesis, Technology and Policy, MIT, May 2008 Spreadsheets for Analysis: Case of Tokyo Bay Aqua-line Case of Tokyo/Haneda Airport Expansion Presents a methodology exploiting flexibility in design of large-scale infrastructure projects in the context of Private Finance Initiative - a form of public-private partnership. The methodology helps managers handle uncertainty, model and evaluate the project, and reduce overall risk. It is applied to the Tokyo airport and Aqua-Line tunnel development projects. Using Real Options to Increase the Value of Intelligent Transportation Systems Richard de Neufville, Kenichi Hodota, Joseph Sussman, and Stefan Scholtes Transportation Research Record Vol. 2086, pp 40-47, DOI 19.3141/2086-05. Applies real options analysis to value design flexibility in a particular type of intelligent transportation system: innovative crash avoidance systems that reduce accidents at highway intersections. Flexibility increases value for systems operating in environments with rapidly changing technology and stakeholder needs. Strategic Planning for Rail System Design -- An Application for Portuguese High-Speed Rail, Boyana Petkova, University of Groningen, Master's Thesis in Industrial Engineering and Management, June 2007 Analyses whether flexibility should be incorporated into upcoming European and Portuguese high-speed railway system design. Dynamic Strategic Planning, of which real options analysis is a great part, is applied to the case study to evaluate financial benefits from flexibility. A Life-Cycle Flexibility Framework for Designing, Evaluating and Managing "Complex" Real Options: Case Studies in Urban Transportation and Aircraft Systems , Joshua McConnell, Doctoral Dissertation, Engineering Systems Division, MIT, May 2007 Introduces the Life-Cycle Flexibility (LCF) framework for evaluating "complex" real options, which accounts for design, evaluation, and management/political phases of real options development and exercise. The LCF integrates systems dynamics and real options methods, and is applied to aircraft and transportation systems. R&D and Deployment of Intelligent Transportation Systems: A Case Example of the Intersection Collision Avoidance Systems Kenichi Hodota, Master of Science Thesis, Transportation, MIT, May 2006 Examines the value of an ongoing R&D and deployment project to reduce crashes at street intersections under public-private partnership as an option for future development in Intelligent Transportation Systems. Decision analysis and hybrid real options analysis are used as valuation methodologies, under scenarios where user acceptance is required and when it is not. Valuing Innovative Technology R&D as a Real Option: Application to Fuel Cell Vehicles Maggie Tsui, Master of Science Thesis, Technology and Policy, MIT, September 2005 Values fuel cell R&D investment as a real option on General Motors's future light passenger vehicle fleet. Applies a 3-step valuation process involving Monte Carlo simulations, constrained linear programming, NPV analysis, and binomial lattice approximation to determine value option and optimal time span for exercise. Managing Risks of Supply-Chain Disruptions: Dual Sourcing as a Real Option Sophie Pochard, MIT, Master of Science Thesis, Technology and Policy, August 2003 Focuses on how firms can prepare against disruption in their supply-chain and use real options thinking to value dual sourcing strategies. A model is developed to value the benefits of dual sourcing. It defines particular circumstances that justify a second supplier. Ship Design - Move up Flexibility in Early Stage Design of US Navy Ships: An Analysis of Options Jonathan Page, MIT, Master of Science Thesis in Engineering and Management and Naval Engineer, June 2011 Water Resources - Move up Flexible Design: An Innovative Approach for Planning Water Infrastructure Systems Under Uncertainty Melanie Wong, MIT, Master of Science Thesis in Technology and Policy, June 2013 Desalination under Uncertainty: Understanding the role of Contractual Arrangements on the Adoption of Flexibility Abdulla Almisnad, MIT, Master of Science Thesis in Technology and Policy, February 2014 Design Process - Move up Design Catalogues: An Efficient Search Approach for Improved Flexibility in Engineering Systems Design M.-A.Cardin and R. de Neufville, 2013 Incose International Conference, Philadelphia. Quantitative Performance-based Evaluation of a Procedure for Flexible Design Concept Generation Michel-Alexandre Cardin, Doctoral Dissertation, MIT Engineering Systems Division, Feb. 2011 |
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BIBLIOGRAPHIES - Move up ----------------------------------------------------------------------------------------------------------------------------------------
Michel-Alexandre Cardin, Richard de Neufville (from working paper): "A Survey of State-of-the-Art Methodologies and a Framework for Identifying and Valuing Flexible Design Opportunities in Engineering Systems", MIT Engineering Systems Division, July 2008 Eun Suk Suh (from his dissertation): "Flexible Product Platforms," MIT Engineering Systems Division, Sept. 2005 The above are recommended reference lists on flexibility and platform design. |