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3.56

Engineering Systems Analysis for Design

Graduate · Historical course

Fall 2008

Topics

  • Motivation: paradigm shift from best outcome to moving distribution of outcomes to right
  • Valuation methods and discussion for uncertainty exercise
  • Uncertainty recognition
  • Discussion of choice of discount rate and production functions
  • Optimum expansion size deterministic case
  • Exercises on production functions and economies of scale
  • Uncertainty assessment
  • Decision analysis practice
  • Value of information and flexibility
  • Benefits of waiting: value of information
  • Decision analysis examples: oil platform, wind energy, silicon wafer plant, Tokyo/Haneda runway
  • Past midterm solutions
  • Mid-semester review
  • Review of midterm and of regression analysis
  • Dynamic programming: systematic solution by “folding back”
  • Dynamic programming and valuation of lattice model
  • Conceptual valuation and application
  • Advice on application portfolios
  • Comparing decision analysis and lattice analysis
  • Perspective on flexibility in design and real options analysis (Part 1)
  • Perspective on flexibility in design and real options analysis (Part 2)

Readings

  • The primary text for the class consists of draft chapters from the new text that Prof. de Neufville is preparing in collaboration with Prof. Stephan Scholtes, his collaborator at the University of Cambridge.
    Listed reading
  • This material is supplemented by chapters from:
    Listed reading
  • de Neufville, Richard. Applied Systems Analysis . New York, NY: McGraw-Hill, 1990. ISBN: 9780070163720.
    Listed reading
  • Textbook chapters from Applied Systems Analysis can also be found here . ↗
    Listed reading
  • The following table shows the schedule of readings from Applied Systems Analysis .
    Listed reading
  • SES #: L9 · TOPICS: Uncertainty assessment · READINGS: Chapter 15
    Reading assignment
  • SES #: L13 · TOPICS: Benefits of waiting: value of information · READINGS: Chapter 17
    Reading assignment
  • SES #: L18 · TOPICS: Dynamic programming: systematic solution by “folding back” · READINGS: Chapter 7
    Reading assignment
Sources