Using simulation for reliable investment appraisal: evidence from a case study

Rossella Pozzi, Carlo Noè, Valentina Lazzarotti and Tommaso Rossi

International Journal of Operational Research, 2015, vol. 23, issue 1, 45-62

Abstract: This paper seeks to develop a model for developing a simulation-based approach to appraise an investment in the logistics context. This study funds the development of the proposed model on a review of literature, on the use of Petri nets, and on the performing of discrete event simulation. The model proposed is presented outlining its steps and, then, applied by means of a case study. From a general point of view, the outcomes of the proposed approach support the combination of simulation and investment appraisal methods. With reference to the case study, the proposed approach has interesting managerial implications. Performing of a unique case study could be perceived as a limitation of this paper, as the repeatability of the proposed approach is not presented. This study provides an example of the application of simulation model supporting investment decisions.

Keywords: Petri nets; modelling; discrete event simulation; investment appraisal; case study; net present value; NPV; operational research; management decisions; decision making; logistics; investment decisions. (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijores:v:23:y:2015:i:1:p:45-62

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