Keywords

Real options analysis, operational innovation, strategic investment, competitiveness, operational innovation transformation

Abstract

Changing the business operations and adopting new operational innovations, have become key features for a business solution approach. However, there are challenges for developing innovative operations due to a lack of the proper decision analysis tools, lack of understanding the impacts transition will have on operational models, and the time limits of the innovation life cycle. The cases of business failure in operational innovation (i.e. Eastman Kodak Company and Borders Group Inc.,) support the need for an investment decision framework. This research aims to develop a Real Option Dynamic Decision (RODD) framework for decision making, to support decision makers for operational innovation investments. This development will help the business/organization to recognize the need for change in operations, and quickly respond to market threats and customer needs. The RODD framework is developed by integrating a strategic investment method (Real Options Analysis), management transition evaluation (Matrix of Change), competitiveness evaluation (Lotka-Volterra), and dynamic behavior modeling (System Dynamics Modeling) to analyze the feasibility of the transformation, and to assess return on investment of new operation schemes. Two case studies are used: United Parcel Service of America, Inc., and Firefighting Operations to validate the RODD framework. The results show that the benefits of this decisionmaking framework are (1) to provide increased flexibility, improved predictions, and more information to decision makers; (2) to assess the value alternative option with regards to uncertainty and competitiveness; (3) to reduce complexity; and (4) to gain a new understanding of operational innovations.

Notes

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Graduation Date

2013

Semester

Fall

Advisor

Rabelo, Luis

Degree

Doctor of Philosophy (Ph.D.)

College

College of Engineering and Computer Science

Department

Industrial Engineering and Management Systems

Degree Program

Industrial Engineering

Format

application/pdf

Identifier

CFE0005039

URL

http://purl.fcla.edu/fcla/etd/CFE0005039

Language

English

Release Date

December 2014

Length of Campus-only Access

1 year

Access Status

Doctoral Dissertation (Open Access)

Subjects

Dissertations, Academic -- Engineering and Computer Science, Engineering and Computer Science -- Dissertations, Academic

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