The Value of Manufacturing Flexibility: Real Options in Practice
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چکیده
This paper treats manufacturing flexibility, ways to achieve it and ways to evaluate flexibility using option pricing. Different ways to increase flexibility are considered from the point of view of two companies. Different types of flexibility are interpreted and modelled as options and ways to evaluate them are considered with respect to amongst other set-up cost and capacity constraints. A numerical example shows the value of having the opportunity to hire personnel on short contracts.
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