This article studies optimal investment in flexible manufacturing capacity as a function of product prices (margins), investment costs and multivariate demand uncertainty. We consider a two-product firm that has the option to invest in product-dedicated resources and/or in a flexible resource that can produce either product, but has to make its investment decision before demands are observed. T...

Recent literature on fuzzy numbers is rich of several approaches to approximate operations between fuzzy numbers. The desirable feature is to preserve the real shape of the fuzzy numbers resulting from the operations, without loosing in simplicity and applicability and in goodness of the approximations. In some recent papers we introduce a representation of the fuzzy numbers, based on the use o...

Traditional real options analysis addresses investment under uncertainty assuming a risk-neutral decision maker and complete markets. In reality, however, decision makers are often risk averse and markets are incomplete. Additionally, capital projects are seldom nowor-never investments and can be abandoned, suspended, and resumed at any time. In this thesis, we develop a utility-based framework...

Numerous research have been discovered to developed internationalization process model (investment to other country market). Like Johanson and Vahlne, they are among the first to discuss the internationalization process model. There are four key items underlying Johanson and Vahlne’s model, those are market knowledge, market commitment, commitment decision, and current activities. However, many...

The economics of investment in cyber security is a widely researched field. This paper describes the use of a multi-player collaborative exercise implemented on computers to help companies better understand investment decisions in cyber security. The investment model driving the collaborative exercise is an expected-value decision analysis that compares the reduction of cyber risks with other i...

Fuzzy economic models to evaluate the economic feasibility of information security investment for decision-makers is derived in this study. The Net Present Value and discounted Return on Investment models are proposed for the execution of cost-benefit analysis. Fuzzy mathematics is based on the extended principles which ensured that the resultant fuzzy number continuously maintained its fuzzy p...

This article presents a comparative analysis of possible postponement strategies in a two-stage decision model where firms make three decisions: capacity investment, production (inventory) quantity, and price. Typically, investments are made while the demand curve is uncertain. The strategies differ in the timing of the operational decisions relative to the realization of uncertainty. We show h...

An application of rigorous statistical analysis in aiding investment decision making gains momentum in the United States of America as well as the United Kingdom. Nonetheless in Malaysia the responses from the local academician are rather slow and the rate is even slower as far as the practitioners are concern. This paper illustrates how Multiple Regression Analysis (MRA) and its extension, Hed...

The standard real–options model predicts that increased uncertainty discourages investment. When projects are large and take time to build, however, that prediction can be reversed. We investigate the investment/uncertainty relationship empirically using historical data on opening dates of new U.S. copper mines — large, irreversible projects with substantial construction lags. Both the timing o...