Flexible Design of Airport System Using Real Options Analysis - MIT

12/14/2007
1.231 Planning and Design of Airport System Dai Ohama
The demand curve shown in Figure 4-3 is still deterministic projection, and this is
usually used for the static analysis. However, it is essential to recognize and consider the
uncertainty in this demand forecasting. Thus, uncertainty is recognized in the model by
simulating possible scenarios. It indicates how fluctuations can be incorporated around
deterministic projections based on the relevant probability distribution. [17] In this case
study, 2,000 Monte Calro Simulations are generated where all of those simulations create
each demand scenarios over the 20 years span. Figure 4-4 shows some of the examples of
simulations of the uncertain demand. All of these scenarios can be considered and
incorporated into the calculation of the expected value of the plans statistically.
120
Demand Forecasting
120
Demand Forecasting
Demand (PAX in million)
100
80
60
40
20
0
Projected Demand (Government)
Projected Demand (This Project)
Demand scenario
1982 1987 1992 1997 2002 2007 2012 2017 2022 2027
Time (Year)
Demand (PAX in million)
100
80
60
40
20
0
Projected Demand (Government)
Projected Demand (This Project)
Demand scenario
1982 1987 1992 1997 2002 2007 2012 2017 2022 2027
Time (Year)
120
Demand Forecasting
120
Demand Forecasting
Demand (PAX in million)
100
80
60
40
20
Projected Demand (Government)
Projected Demand (This Project)
Demand scenario
Demand (PAX in million)
100
80
60
40
20
Projected Demand (Government)
Projected Demand (This Project)
Demand scenario
0
1982 1987 1992 1997 2002 2007 2012 2017 2022 2027
Time (Year)
0
1982 1987 1992 1997 2002 2007 2012 2017 2022 2027
Time (Year)
Figure 4-4 Examples of Simulation of the Uncertain Demand
4.4 Summary of Analysis Condition
The Table 4-3 shows the summary of analysis condition.
Term Project: Flexible Design of Airport System Page 17 of 22