Platforms and real options in large-scale engineering systems

This thesis introduces a framework and two methodologies that enable engineering management teams to assess the value of real options in programs of large-scale, partially standardized systems implemented a few times over the medium term. This enables value creation through the balanced and complementary use of two seemingly competing design paradigms, i.e., standardization and design for flexibility. The flexibility of a platform program is modeled as the developer's ability to choose the optimal extent of standardization between multiple projects at the time later projects are designed, depending on how uncertainty unfolds. Along the lines of previous work, this thesis uses a two-step methodology for valuing this flexibility: screening of efficient standardization strategies for future developments in a program of projects; and valuing the flexibility to develop one of these alternatives. The criterion for screening alternative future standardization strategies is the maximization of measurable standardization effects that do not depend on future uncertainties.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Kalligeros, Konstantinos C., 1976-

Advisor dc:contributor.advisor

• Richard de Neufville.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/34620
• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Identifier URI

http://dspace.mit.edu/handle/1721.1/34620

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/34620