Flexible Design of Airport System Using Real Options Analysis - MIT

Table of Contents
1. Introduction .................................................................................................................1
2. Outline of the Case Project.........................................................................................1
2.1 Tokyo International Airport....................................................................................1
2.2 Runway Extension Project......................................................................................2
2.3 Current Design is Optimal? ....................................................................................3
2.4 Project Capacity of Airport.....................................................................................5
2.5 Flexible Design.......................................................................................................5
3. Real Options Analysis .................................................................................................6
3.1 Financial Options Theory .......................................................................................6
3.1.1 Black-Sholes Option Pricing Model ................................................................7
3.1.2 Binomial Lattice Model ...................................................................................8
3.1.3 Monte Calro Simulation...................................................................................9
3.2 Real Options Analysis ............................................................................................9
3.2.1 Real Options.....................................................................................................9
3.2.2 Types of Real Options ...................................................................................10
3.3 Application of Real Options Analysis to Case Study...........................................10
3.3.1 Which Method should be used for the Case Study? ......................................10
3.3.2 Real Options Analysis Using Monte Calro Simulation .................................11
4. Analysis of Case .........................................................................................................11
4.1 Analysis Condition ...............................................................................................11
4.1.1 Capital Investment .........................................................................................12
4.1.2 Revenues and Costs .......................................................................................13
4.1.3 Capacity of Airport ........................................................................................14
4.1.4 Discount Rate.................................................................................................14
4.2 Uncertainty in System...........................................................................................14
4.3 Demand Forecasting .............................................................................................15
4.4 Summary of Analysis Condition ..........................................................................17
4.5 Result of Analysis.................................................................................................18
5. Conclusion..................................................................................................................21
6. References ..................................................................................................................22