Overstock – A Real Option Approach

A fuzzy approach to real option valuation

To have a real option means to have the possibility for a certain period to either choose for or against making an invetsment decision, without binding oneself up front. The real option rule is that one should invest today only if the net present value is high enough to compensate for giving up the value of the option to wait. Because the option to invest loses its value when the investment is ...

Strategic Outsourcing - A Real Option Approach

Determination of Ultimate Pit Limits in Open Mines Using Real Option Approach

Planning and design procedure of an open pit mining project just can be started after ultimate pit determination. In the carried out study in this paper it was shown that the most important factor in ultimate pit determination and in consequence in the whole planning and design procedure of an open pit mine is the metal price. Metal price fluctuations in recent years were exaggerated and impose...

SCM System Vendor Selection: A Real Option Approach

Information technology (IT) outsourcing is one of the major issues facing organizations in today's rapidly changing business environment. Due to its very nature of uncertainty, it is critical for companies to manage and mitigate the high risks associated with IT outsourcing practices including the task of vendor selection. In this study, we explore the two-stage vendor selection approach in IT ...

A real option analysis approach to evaluating digital government investment

Real option analysis has been studied and applied in evaluating information technology (IT) investments for more than a decade. Its advantages over the traditional discounted cash flow techniques have been widely recognized in the information systems (IS) community. However real option analysis has yet to be seen in valuing digital government projects where the real option analysis and option t...