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Fred Moavenzadeh and Joseph Sussman. Moriyama, Yasuaki, 1972- Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering. Massachusetts Institute of Technology. Department of Civil and Environmental Engineering 2009-10-01T16:04:33Z 2009-10-01T16:04:33Z 2003 2003 http://hdl.handle.net/1721.1/47922 52872451 Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2003. Includes bibliographical references (p. 117-119). This thesis examines decision analysis methods of capital investment in transportation systems. The transportation system is a fundamental infrastructure, and requires strategic thinking in making decisions on its projects. The current valuation methods, however, do not reflect the strategic value of a project. We investigate how to make a strategic decision by comprehensively valuing a project in transportation systems. This study begins by analyzing the characteristics and risks of a railway project as an example of the transportation system, and comparing the current valuation methods based on this analysis. Current methods are useful in valuing a project when we can fairly predict its performance in the system. However, we have difficulty in valuing a project under uncertainty. Focusing on the present value of cash flows does not properly measure the significance of a strategic project, but real options value (ROV) is an effective tool to do it. We next examine the theoretical correctness of the real options as applied to a transportation project. The critical question is whether we can create a portfolio that replicates the payoffs of options even if we cannot trade the options in a market. We answer this question by proposing the complete market assumption in the real options. To this end, we analyze a case of a railway project with Binominal Model. ROV quantifies the strategic value of a project, and consequently improves the investment strategy. We show how it is critical to recognize options in a project and benefit from them to effectively develop transportation systems in a competitive market. by Yasuaki Moriyama. S.M. 119 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 Civil and Environmental Engineering. Strategic decision analysis for transportation systems Thesis application/pdf Publication unknown unknown <Publication xmlns="https://www.openaire.eu/cerif-profile/1.1/" id="a11ef576-681d-4bd5-b037-97e3bed92654"> <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>Strategic decision analysis for transportation systems</Title> <PublishedIn> <Publication> </Publication> </PublishedIn> <PublicationDate>2003</PublicationDate> <Authors> <Author> <DisplayName>Moriyama, Yasuaki, 1972-</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>Civil and Environmental Engineering.</Keyword> <Abstract>This thesis examines decision analysis methods of capital investment in transportation systems. The transportation system is a fundamental infrastructure, and requires strategic thinking in making decisions on its projects. The current valuation methods, however, do not reflect the strategic value of a project. We investigate how to make a strategic decision by comprehensively valuing a project in transportation systems. This study begins by analyzing the characteristics and risks of a railway project as an example of the transportation system, and comparing the current valuation methods based on this analysis. Current methods are useful in valuing a project when we can fairly predict its performance in the system. However, we have difficulty in valuing a project under uncertainty. Focusing on the present value of cash flows does not properly measure the significance of a strategic project, but real options value (ROV) is an effective tool to do it. We next examine the theoretical correctness of the real options as applied to a transportation project. The critical question is whether we can create a portfolio that replicates the payoffs of options even if we cannot trade the options in a market. We answer this question by proposing the complete market assumption in the real options. To this end, we analyze a case of a railway project with Binominal Model. ROV quantifies the strategic value of a project, and consequently improves the investment strategy. We show how it is critical to recognize options in a project and benefit from them to effectively develop transportation systems in a competitive market.</Abstract> <Access xmlns="http://purl.org/coar/access_right" > </Access> </Publication>