Real Options "in" Projects and Systems Design ... - Title Page - MIT

27General applicability and case examplesAs shown in Figure 1-3, the contribution of the work would be providing a generalapproach that large-scale engineering systems can use for their specific systems todesign flexibility. Case examples will be drawn on two different large-scale engineeringsystems, namely, water resources systems and satellite communications systems,showing the generalizability of the approach as well as helping illustration of theapproach. The case examples also provide a foundation for water resources engineersand satellite systems engineers to add more details and serve for actual application. Thecore of the approach is a screening model to identify options and a mixed-integerprogramming real options timing model to analyze options.AnalyiswithOptionsThinkingGeneralMore DetailsEngineering SystemsRiver Basin SatelliteDevelopment Systems"…"This workFigure 1-3 Contribution and generalizability of the work1.3. Theme and Structure of the DissertationThis dissertation proposes a two-stage options identification and analysis framework todesign flexibility (real options) into physical systems, with case examples on river basindevelopment and satellite communications systems.The structure of the dissertation is as in Figure 1-4: Chapter 2 reviews literature onengineering systems, water resources planning, mathematical programming, and optionstheory. Chapter 3 introduces standard options theory. Its focus is on the optionsvaluation models and their key assumptions. Chapter 4 introduces real options,