Valuing Cross-Border Capacity as a Real Option: An IOHMM Approach

The right to use a certain amount of capacity in an electrical cable between two countries for the purpose of trading energy is an asset that can be bought. Each hour of capacity can be seen as a real spread option with the energy prices of each country being the underlying processes. In this thesis we build a model to find the fair value of a...

A Hybrid Real Options Model to Assess the Impact of an Innovation on Existing Infrastructure Assets

Infrastructure finds itself at a convoluted juncture. A vast network of problems and choices are to be made, where the right course of action can solve the issues that has befuddled the infrastructure domain. These problems can be briefly described as; ageing assets that are no longer fit for purpose, use of infrastructure as a political tool...

Decision Support for Port Investments: A Real Options Approach

Expansions for future demand? How much capacity will be required? Until when the decision can be postponed? When to expand? What should be the magnitude of expansion? What is the position of such an investment? These are the kind of questions which a port authority is subjected to while making a decision to expand or develop a port. The decision...

Optimized Expansion Strategy for a Hydrogen Pipe Network in the Port of Rotterdam with Compound Real Options Analysis

<br/>The port of Rotterdam is the largest seaport in Europe. To maintain its position, the harbor will have to anticipate global transitions such as transferring to sustainable energy. Hydrogen is seen as a promising energy carrier; however, future demand is uncertain. The current research investigates decision making under uncertainty and...

Infrastructure maintenance and replacement optimization under multiple uncertainties and managerial flexibility

Infrastructure maintenance and replacement decisions are subject to uncertainties such as regular asset degradation, structural failure, and price uncertainty. In the engineering domain, Markov Decision Processes (MDPs) typically focus on uncertainties regarding asset degradation and structural failure. While the literature in the engineering...

Evaluating the usefulness of including flexibility in public transport network design and planning

Investing in urban transit is necessary to fuel urban growth and sustainable mobility. Decision making for public transport projects usually involves long term forecasts of travel demand. Future development of factors that influence those forecasts and hence the expected net societal benefits of the investments are uncertain. Decision makers may...

Improving decision-making in road widening projects: A real option tool?

Many road widening projects are only profitable when there is a high growth in traffic intensity in the future which is uncertain. Therefore, it could be beneficial to apply real option analysis in which the costs and benefits of flexible alternatives, e.g. in delay and phasing, can be assessed. Real option analysis is not often applied in...

Development of Climate Resilient Ports: Achieving Viable and Efficient Investments in Landlord Container Terminals

Being nodal points in global supply chain network, port operations disrupted by adverse climate change impacts would bear substantial costs. Therefore, adapting ports to climate change and building their climate resilience are essential. However, the needs may not have been adequately acknowledged by port stakeholders. A series of problem...

The Development and Application of a Value-Driven Aircraft Maintenance Operations Performance Assessment Model combined with Real Options Analysis

This research paper presents the results from the development of an Aircraft Maintenance Operations Performance Assessment Model (AMOPAM). The AMOPAM is able to assess the differences in performance in between two different states or scenarios of aircraft maintenance operations and is able to capture these differences both in the form of...

Implementing Real Options in Engineering Projects: A conceptual framework to adopt Real Options

This thesis aims to uncover the required efforts and expenses to adopt and enable real options implementation in projects. A conceptual design is proposed how real options can be implemented in project organizations.