Degree Type

Dissertation

Date of Award

2018

Degree Name

Doctor of Philosophy

Department

Industrial and Manufacturing Systems Engineering

Major

Industrial and Manufacturing Systems Engineering

First Advisor

Jo Min

Abstract

Investments in transportation sector have arisen as significant problems due to the substantial cost of maintaining required level of service. Energy transportation draws a particular attention. In this dissertation, we focus on two special forms of energy transportation problems. On the one hand, we study the quantification of value of expansion investments in high-voltage power lines. On the other hand, we quantify the value of expansion of capacities for U.S. Navy transportation ships. Problems are subject to severe uncertainties being in the form of smooth changes and discrete disruptions. We use geometric Brownian motion and Poisson arrival processes to model both types of evolutions, respectively. We utilize real options approach to quantify the values of expansion options and provide decision makers with managerial insights.

My dissertation consists of three papers. In the first paper, we quantify the value of expansion options in transmission lines. Revenue of the investment is calculated based on differences between locational marginal prices. This research reveals that the proportion of susceptance of a power line to its power-carrying capacity is a significant factor to determine the value of an expansion investment. In the second paper, we quantify the value of option to expand the capacity of a U.S. Navy transportation ship. Decision maker can either choose flexible design (relatively more prepared for expansion) or fixed design at initial design phase. Our study indicates that flexible design should be preferred over fixed design if initial demand (for transported item) value is relatively lower. Third paper revisits transmission expansion problem and adopts installation of local generators as an uncertainty in the form of discrete disruption. It shows that the value of transmission network does not always reduce with the installation, instead location of the installation plays a key role.

DOI

https://doi.org/10.31274/etd-180810-6024

Copyright Owner

Fikri Kucuksayacigil

Language

en

File Format

application/pdf

File Size

197 pages

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