A numerical method of evaluating brownfields using fuzzy boundaries and fuzzy real options

A numerical technique for evaluating brownfields is proposed. The method is based on the representation of redevelopment strategies using fuzzy real options, which can be evaluated using an extended Least Squares Monte-Carlo (LSM) simulation. By employing a fuzzy boundary to represent the contaminated region of a brownfield, the parameters of various options for redevelopment can be estimated. Beginning with expert judgments on multiple factors at different locations, a decision support system can map a possibly polluted area using fuzzy real option parameters determined according to an ordered weighted averaging (OWA) technique. The results can be input directly into a decision process. A particular advantage of extended LSM lies in its ability to produce results whether or not an analytic solution exists, making fuzzy real options very widely applicable to brownfield development pricing.