DocumentCode
2119359
Title
A real options design for product outsourcing
Author
Nembhard, Harriet Black ; Aktan, Mehmet ; Shi, Leyuan
Author_Institution
Dept. of Ind. Eng., Wisconsin Univ., Madison, WI, USA
Volume
1
fYear
2001
fDate
2001
Firstpage
548
Abstract
We develop a financial model to assess the option value of outsourcing. We value the real options associated with outsourcing an item using Monte Carlo simulation. This valuation gives decision makers a way to choose the appropriate outsourcing strategy based on an integrated view of market dynamics. A simulation example is used to demonstrate the application of real options to value outsourcing. The simulation program code was written in JavaScript so that the valuation task would be accessible to other users because of its web enabled feature
Keywords
Java; Monte Carlo methods; digital simulation; financial data processing; manufacturing data processing; outsourcing; JavaScript; Monte Carlo simulation; Web enabled feature; decision makers; financial model; market dynamics; option value; product outsourcing; real options design; simulation; valuation; Cost accounting; Globalization; Industrial engineering; Java; Lattices; Manufacturing; Outsourcing; Process control; Product design; Uncertainty;
fLanguage
English
Publisher
ieee
Conference_Titel
Simulation Conference, 2001. Proceedings of the Winter
Conference_Location
Arlington, VA
Print_ISBN
0-7803-7307-3
Type
conf
DOI
10.1109/WSC.2001.977337
Filename
977337
Link To Document