Replacement optimisation for public infrastructure assets: Quantitative optimisation modelling taking typical public infrastructure related features into account

Ageing infrastructures and shortage of financing induce the need for optimising public infrastructure replacements. From an economic perspective, classical net present value comparison is traditionally the method of choice to decide on investments and replacements. The current research observes that typical infrastructure related features make...

Untangling decision tree and real options analyses: a public infrastructure case study dealing with political decisions, structural integrity and price uncertainty

Managerial flexibility in infrastructure investment and replacement decisions adds value. Real options analysis (ROA) captures this value under uncertain market prices. The concept of ROA is that future unfavourable payoffs can be deferred as soon as more information about market prices becomes available. The popularity of ROA is seen in a...