Real Options Identification and Valuation for the Financial Analysis of Product Family Design

Jiao, R, Lim, C and Kumar, A 2006, 'Real Options Identification and Valuation for the Financial Analysis of Product Family Design', the Proc.IMechE Part B: Journal of Engineering Manufacture, vol. 220, no. 6, pp. 929-939.


Document type: Journal Article
Collection: Journal Articles

Title Real Options Identification and Valuation for the Financial Analysis of Product Family Design
Author(s) Jiao, R
Lim, C
Kumar, A
Year 2006
Journal name the Proc.IMechE Part B: Journal of Engineering Manufacture
Volume number 220
Issue number 6
Start page 929
End page 939
Total pages 11
Publisher Professional Engineering Publishing Ltd.
Abstract The rationale of product family design has been well recognized by both academia and industries alike. It is important to justify the economic latitude of product families. The traditional valuation approaches based on discounted-cash-flow analysis tend to ignore the upside potentials from managerial flexibility inherent in the product family design process. This paper adopts a real option approach to model product family design as an investment strategy being crafted by a series of options that are continuously exercised to achieve expected returns on investment. The focus is on the identification of real options associated with product family design. In accordance with the real options identified, a valuation framework is developed. To demonstrate the feasibility and potential of the real option framework, a case study of mobile phone vibration motor family design is reported.
Subject Mechanical Engineering not elsewhere classified
DOI - identifier 10.1243/09544054B02304
Copyright notice © IMechE 2006.
ISSN 0954-4054
Versions
Version Filter Type
Citation counts: Scopus Citation Count Cited 12 times in Scopus Article | Citations
Altmetric details:
Access Statistics: 115 Abstract Views  -  Detailed Statistics
Created: Mon, 06 Dec 2010, 14:11:00 EST by Catalyst Administrator
© 2014 RMIT Research Repository • Powered by Fez SoftwareContact us