Title

Hybrid Real Options For Emerging Technologies, Green Energy, And Innovation

Keywords

Operational innovation; Real Options; Risk analysis; Solar energy; Weighted average cost of capital

Abstract

This paper discusses decision making processes for technology investments using a hybrid approach integrating Real Options Analysis (ROA), Monte Carlo Simulations (MCS), System Dynamics (SD)/Agent Based (AB) modeling, Supply Chain Operation Reference Model (SCOR), and competitive analysis. The first part discusses the utilization of ROA to evaluate the introduction of new smartphone technology in Central America. Several dimensions are introduced into the model and solved including innovation diffusion, systematic risk, cost of capital, and arbitrage while proxies are drawn from international financial markets, and a dual SD/AB modeling approach is utilized combined with executive interviews. The second part creates a green ROA framework that builds a network of the different members of the supply chain of solar energy using SCOR. This network is utilized to study the competitive environment at different stages (from the sources of innovation in solar cells to the industrial and residential markets). Measures such as environmental footprint and energy efficiency are utilized to decide where the incentives should be provided. Finally, the development of operational innovation process system architectures is studied. A hybrid approach is implemented by integrating ROA, MCS and a dual SD modeling and multi-mode Lotka-Volterra to capture competitive issues.

Publication Date

1-1-2013

Publication Title

IIE Annual Conference and Expo 2013

Number of Pages

387-396

Document Type

Article; Proceedings Paper

Personal Identifier

scopus

Socpus ID

84900333885 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84900333885

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