Case Study: Flexibility in the Manufacturing Industry

Alexander Vollert
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Alexander Vollert: Universität Karlsruhe (TH)

Chapter 6 in A Stochastic Control Framework for Real Options in Strategic Evaluation, 2003, pp 169-239 from Springer

Abstract: Abstract So far the analysis has concentrated on the introduction of the stochastic control framework and the graphical decomposition method. Afterwards we extended the framework to deal with several special problems that occur with real options. But we have still not fully exploited the potential of the stochastic control framework to handle complex option interaction models. For that reason a realistic real option interaction model of production flexibility that might occur in practice will be presented in this chapter along with its main implications from an economic point of view as well as from a valuation technical point of view.

Keywords: Cash Flow; Real Option; Product Life Cycle; Intensity Option; Growth Regime (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4612-2068-8_6

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DOI: 10.1007/978-1-4612-2068-8_6

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