Campus Units

Industrial and Manufacturing Systems Engineering

Document Type

Conference Proceeding

Publication Version

Published Version

Publication Date

6-23-2018

Journal or Book Title

2018 ASEE Annual Conference & Exposition

First Page

22778

Research Focus Area(s)

Construction Engineering and Management

Conference Title

2018 ASEE Annual Conference & Exposition

Conference Date

June 24-27, 2018

City

Salt Lake City, UT

Abstract

Complex engineering projects (CEPs) such as electric transmission networks and transportation infrastructure are becoming increasingly important to the public in general and even more so to engineers. These projects are large-scale in terms of money and time and contain significant uncertainties over their life-cycle, with fluctuations in input and output costs. Due to these uncertainties, there are conditional opportunities (e.g., on prices) to make critical decisions such as investment in construction of power generation facilities or decommissioning of such facilities. Such decisions constitute strategic flexibilities or "real options" because the decision maker can alter the course of an investment over time when an uncertain aspect of the project such as the price becomes known. The current practice in engineering curricula, however, does not address the declarative and procedural knowledge necessary for critical economic decision making. We propose to (1) develop a module in an introductory course emphasizing the concept of the aforementioned strategic flexibilities and (2) develop an advanced course that is mathematically rigorous, yet with in-depth case studies for the CEPs. The module addresses the valuation of the strategic flexibilities over the life of CEPs to provide managerial insights and economic intuition. The advanced course emphasizes project experience including data-based parameter estimation and computation for optimal decisions. Both the module and course teaching materials will be complemented by a set of visualization aids for the key concepts and applications.

Comments

This proceeding is published as Min, K. Jo, John Jackman, and Farshad Niayeshpour. "Board 106: Enhancing Critical Life-Cycle Decision Making in Complex Engineering Projects in the Context of Engineering Economy Courses." In 2018 ASEE Annual Conference & Exposition. 2018. Paper ID #22778.

Rights

ASEE holds the copyright on this document. It may be read by the public free of charge. Authors may archive their work on personal websites or in institutional repositories with the following citation: © 2018 American Society for Engineering Education.

Copyright Owner

American Society for Engineering Education

Language

en

File Format

application/pdf

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