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Richard de Neufville. Rivey, Darren System Design and Management Program. System Design and Management Program. 2008-11-07T19:02:34Z 2008-11-07T19:02:34Z 2007 2007 http://hdl.handle.net/1721.1/43102 244635823 Thesis (S.M.)--Massachusetts Institute of Technology, System Design and Management Program, 2007. Includes bibliographical references (p. 77-83). This research identifies how Real Options (RO) thinking might acceptably and effectively complement the current mandates for Benefit-Cost Analysis (BCA) defined by the Office of Management and Budget (OMB) in Circular A-94. The research examines opportunities for improving economic analysis using mandated rules for a large complex system, highlights where improvements can be made with RO thinking, and proposes a framework that can be optionally and generically applied to mandated decisionmaking guidelines. The framework relies on a simple spreadsheet analysis that is augmented with Monte-Carlo simulation. The proposed approach complements existing practices and should be easy to integrate with current tools, procedures, staff, and resources.This approach builds upon a careful analysis of Federal mandates for benefit-cost analyses, the implementing directions of the OMB, and the way these guidelines are followed by practitioners who have to deal with the particularities that exist in the field. The current practice was determined by examining several case studies of work for the Federal Aviation Administration (FAA) and through discussions with FAA officials knowledgeable about the BCA methods in practice. The proposed approach with FAA Airport Benefit-Cost Analysis Guidelines was applied to a Hypothetical Project for illustrative purposes. by Darren Rivey. S.M. 97 p. eng Massachusetts Institute of Technology 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. http://dspace.mit.edu/handle/1721.1/7582 System Design and Management Program. A practical method for incorporating Real Options analysis into US federal benefit-cost analysis procedures Practical method for incorporating RO analysis into United States federal BCA procedures Thesis application/pdf Publication unknown unknown <Publication xmlns="https://www.openaire.eu/cerif-profile/1.1/" id="eab074bc-d29e-4f76-a369-79b6aa93a033"> <Type xmlns="https://www.openaire.eu/cerif-profile/vocab/COAR_Publication_Types">http://purl.org/coar/resource_type/c_1843</Type> <Language>eng</Language> <Title>A practical method for incorporating Real Options analysis into US federal benefit-cost analysis procedures</Title> <Subtitle>Practical method for incorporating RO analysis into United States federal BCA procedures</Subtitle> <PublishedIn> <Publication> </Publication> </PublishedIn> <PublicationDate>2007</PublicationDate> <Authors> <Author> <DisplayName>Rivey, Darren</DisplayName> <Affiliation> <OrgUnit> </OrgUnit> </Affiliation> </Author> </Authors> <Editors> </Editors> <Publishers> <Publisher> <DisplayName>Massachusetts Institute of Technology</DisplayName> <OrgUnit /> </Publisher> </Publishers> <License>http://dspace.mit.edu/handle/1721.1/7582</License> <Keyword>System Design and Management Program.</Keyword> <Abstract>This research identifies how Real Options (RO) thinking might acceptably and effectively complement the current mandates for Benefit-Cost Analysis (BCA) defined by the Office of Management and Budget (OMB) in Circular A-94. The research examines opportunities for improving economic analysis using mandated rules for a large complex system, highlights where improvements can be made with RO thinking, and proposes a framework that can be optionally and generically applied to mandated decisionmaking guidelines. The framework relies on a simple spreadsheet analysis that is augmented with Monte-Carlo simulation. The proposed approach complements existing practices and should be easy to integrate with current tools, procedures, staff, and resources.This approach builds upon a careful analysis of Federal mandates for benefit-cost analyses, the implementing directions of the OMB, and the way these guidelines are followed by practitioners who have to deal with the particularities that exist in the field. The current practice was determined by examining several case studies of work for the Federal Aviation Administration (FAA) and through discussions with FAA officials knowledgeable about the BCA methods in practice. The proposed approach with FAA Airport Benefit-Cost Analysis Guidelines was applied to a Hypothetical Project for illustrative purposes.</Abstract> <Access xmlns="http://purl.org/coar/access_right" > </Access> </Publication>