Real options based approaches to decision making under uncertainty

Michael J. Rogers, Anshuman Gupta, Costas D. Maranas

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Most of the research in the process systems engineering literature has focused within an enterprise's boundaries without recognizing the existence of financial markets to mitigate the risks associated with planning decisions made in the face of uncertainty. This paper discusses the incorporation of a market-based technique known as real options valuation (ROV) to models of pharmaceutical portfolio management and pollution abatement planning. The key managerial insights of this approach, that external financial market information can be used for valuing the flexibility of internal planning decisions and that both financial as well as real assets can be used to achieve desired objectives, are presented through planning case studies that demonstrate the capabilities of the models.

Original languageEnglish (US)
Pages (from-to)310-315
Number of pages6
JournalComputer Aided Chemical Engineering
Volume15
Issue numberC
DOIs
StatePublished - Dec 1 2003

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Decision making
Planning
Process engineering
Systems engineering
Drug products
Pollution
Uncertainty
Pharmaceutical Preparations
Industry
Financial markets

All Science Journal Classification (ASJC) codes

  • Chemical Engineering(all)
  • Computer Science Applications

Cite this

Rogers, Michael J. ; Gupta, Anshuman ; Maranas, Costas D. / Real options based approaches to decision making under uncertainty. In: Computer Aided Chemical Engineering. 2003 ; Vol. 15, No. C. pp. 310-315.
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Real options based approaches to decision making under uncertainty. / Rogers, Michael J.; Gupta, Anshuman; Maranas, Costas D.

In: Computer Aided Chemical Engineering, Vol. 15, No. C, 01.12.2003, p. 310-315.

Research output: Contribution to journalArticle

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