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Valuation techniques for commercial aircraft program design

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dc.contributor.advisor Karen Willcox. en_US Markish, Jacob, 1978- en_US
dc.contributor.other Massachusetts Institute of Technology. Dept. of Aeronautics and Astronautics. en_US 2005-05-19T15:06:13Z 2005-05-19T15:06:13Z 2002 en_US 2002 en_US
dc.description Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Aeronautics and Astronautics, 2002. en_US
dc.description Includes bibliographical references (p. 147-149). en_US
dc.description This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. en_US
dc.description.abstract This research considers the commercial aircraft design process from the perspective of program value. Whereas traditionally, the conceptual design of aircraft has often focused on minimum weight, or sometimes minimum cost, this approach demonstrates the feasibility and usefulness of design based on maximum value to the aircraft manufacturer. A program valuation tool is developed and demonstrated that measures the overall program value associated with a set of either one or two new aircraft concepts. The tool is based on a combination of a performance model; a development and manufacturing cost model; a revenue model; and a dynamic programming-based algorithm that accounts for uncertainty in future market conditions and the program's ability to cope with such uncertainty through real-time decision-making. The cost model, using a component-based representation of the aircraft, allows for the consideration of the effects of part commonality on development and production costs. The revenue model, based on an analysis of existing commercial aircraft, estimates a market price and demand forecast for a new aircraft based on several key characteristics. The dynamic programming algorithm, used to find program value, treats annual aircraft quantity demanded as a stochastic process, evolving unpredictably with time. The algorithm borrows from Real Options theory to discount future cash flows using risk-neutral expectations and models the aircraft program as an actively managed project with real-time decision-making to maximize expected program value. Several examples are drawn from the Blended-Wing-Body aircraft concept to demonstrate the operation of the program valuation tool. The results suggest that the value of part commonality between aircraft may be strongly sensitive to the weight penalty and increased fuel burn resulting from a common derivative design. More generally, the example results illustrate the usefulness of the explicit consideration of flexibility in program valuation and the feasibility of a conceptual aircraft design tool based on the metric of program value. en_US
dc.description.statementofresponsibility by Jacob Markish. en_US
dc.format.extent 153 p. en_US
dc.format.extent 845057 bytes
dc.format.extent 844811 bytes
dc.format.mimetype application/pdf
dc.format.mimetype application/pdf
dc.language.iso eng en_US
dc.publisher Massachusetts Institute of Technology en_US
dc.rights M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. en_US
dc.subject Aeronautics and Astronautics. en_US
dc.title Valuation techniques for commercial aircraft program design en_US
dc.type Thesis en_US S.M. en_US
dc.contributor.department Massachusetts Institute of Technology. Dept. of Aeronautics and Astronautics. en_US
dc.identifier.oclc 51679351 en_US

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