Flexible system development strategies for the Chuo Shinkansen Maglev Project : dealing with uncertain demand and R&D outcomes

As a large-scale, long-term transportation project, the Chuo Shinkansen Maglev Project in Japan includes various uncertainties. Among them, two major uncertainties are identified in this thesis: the uncertainty of demand and the risk of R&D. Because each Maglev train requires a dedicated Power Conversion System (PCS) but a different one as it moves along the route, it is required to estimate the future demand accurately to determine the number of PCSs to construct. At the same time, the R&D to advance the technologies of PCS has the possibility of improving the project value by enabling staged flexible system development strategies. Since it is difficult to correctly estimate demand and R&D results, a framework that can evaluate projects with explicit considerations of these uncertainties is needed. In the light of the above background, this thesis develops a quantitative model that is appropriate for evaluating the Chuo Shinkansen Project. More specifically, this thesis applies the hybrid real options model, which is suitable for appraising projects with both market risks and R&D risks, in an innovative manner, addressing four major complexities that arise when applying the model to the project:

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2007

Author dc:creator

• Ishii, Masaki, S.M. Massachusetts Institute of Technology

Advisor dc:contributor.advisor

• Joseph M. Sussman.

• 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/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/39329

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/39329