Abstract
This paper presents a problem structuring methodology to assess real option decisions in the face of unpredictability. Based on principles of robustness analysis and scenario planning, we demonstrate how decision-aiding can facilitate participation in projects setting and achieve effective decision making through the use of real options reasoning. We argue that robustness heuristics developed in earlier studies can be practical proxies for real options performance, hence indicators of efficient flexible planning. The developed framework also highlights how to integrate real options solutions in firms’ strategic plans and operating actions. The use of the methodology in a location decision application is provided for illustration.
Original language | English |
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Pages (from-to) | 698-710 |
Number of pages | 13 |
Journal | Omega (Elsevier) |
Volume | 37 |
Issue number | 3 |
DOIs | |
Publication status | Published - Jun 2009 |
Keywords
- soft OR
- efficiency
- group decisions
- planning and control
- robustness analysis
- real options