A Risk-based Real Options Framework for Flexible Technology Planning

Juite Wang, Chuan-Hung Cheng, Yung-I Lin, Chih-Hsin Chang

Abstract

Although the importance of R&D is well understood by technology-based firms, with the increasing uncertainty in technology development and market trends in recent years, managing uncertain R&D projects to enhance competitive technological position is still a major challenge for those firms. This research develops a technology planning framework that integrates R&D risk management with real options analysis enables technology-based firms to allocate their limited R&D resources with managerial flexibility for maximizing the expected market value of R&D project under uncertainty. The proposed technology planning framework consists of four stages: technology roadmapping, risk identification, risk response planning, and flexible plan optimization. Since technology development usually involves great uncertainty at early R&D stages, the Monte-Carlo simulation optimization technique is applied to evaluate and select optimal technology plans under different scenarios. The developed methodology is illustrated with a case study of ASIC power module technology development project in Taiwan.

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Paper Citation


in Harvard Style

Wang J., Cheng C., Lin Y. and Chang C. (2016). A Risk-based Real Options Framework for Flexible Technology Planning . In Proceedings of 5th the International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES, ISBN 978-989-758-171-7, pages 279-286. DOI: 10.5220/0005736702790286


in Bibtex Style

@conference{icores16,
author={Juite Wang and Chuan-Hung Cheng and Yung-I Lin and Chih-Hsin Chang},
title={A Risk-based Real Options Framework for Flexible Technology Planning},
booktitle={Proceedings of 5th the International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,},
year={2016},
pages={279-286},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0005736702790286},
isbn={978-989-758-171-7},
}


in EndNote Style

TY - CONF
JO - Proceedings of 5th the International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,
TI - A Risk-based Real Options Framework for Flexible Technology Planning
SN - 978-989-758-171-7
AU - Wang J.
AU - Cheng C.
AU - Lin Y.
AU - Chang C.
PY - 2016
SP - 279
EP - 286
DO - 10.5220/0005736702790286