Abstract
Investment policy has considerable importance for strategic business planning. The right choice of investments defines future success potentials and secures the long-term survival of a company. Turbulent economic conditions and increasing struggle necessitate flexibility which is obtained through project-inherent opportunities. The design of mobile production resources enables the company to change the production site within the lifecycle of a product. Assuming uncertain expectations the value of mobility to appropriately react to changing environment can be compared with an option and consequently has to be considered in the investment decision. Since traditional investment methods do not adequately consider flexibility, they can lead to a systematic undervaluation of projects with inherent degrees of freedom. The real option price theory, based on the financial option price theory, is a means to evaluate options that are ingrained in real objects and consequently help to overcome the deficiencies of traditional methods.
| Translated title of the contribution | Valuation of mobile production scenarios based on the real option approach |
|---|---|
| Original language | German |
| Pages (from-to) | 646-651 |
| Number of pages | 6 |
| Journal | ZWF Zeitschrift fuer Wirtschaftlichen Fabrikbetrieb |
| Volume | 98 |
| Issue number | 12 |
| DOIs | |
| State | Published - Dec 2003 |