DECADES INFOGRAPHIC

real options method calculated with desicion trees

Establishing deterministic probabilities can become a quiet subjective task, making the assessment lose objectivity and consistency with reality

The objetive of real options is to measure and give value to the flexibility that magagement has to make sequential decisions in the time, once a certain investment Project has been launched and has descolsed relevant information The real options expose the value behind the uncertainties inherent in any Project, and allow to make previosly contemplated decisión, considering the value overlooked by traditional valuation methods

Definition

A decision tree diagram allows you to graphically evaluate the possible outcomes, costs, and consequences of a complex decision. This method is very useful for analyzing quantitative data and making a decision based on numbers. In this article, we will explain how to use a decision tree to calculate the expected value of each outcome and determine the best plan of action. Additionally, we show you an example of what a finished decision tree would look like.

Relatec Processes

El método de opciones reales permite asignar valor a la flexibilidad y las decisiones en un entorno de incertidumbre. Es especialmente relevante en proyectos de investigación y desarrollo, expansión de plantas de fabricación y otros activos no financieros

Mathematical formulas

Answer to the question: How can companies create value from their innovation?

Applying a systemic approach to quality involves the development of a structured and explicit methodology, which establishes the purposes of the system, the area of intervention, the technical approach or the quality tools selected, the structure of the methodology, the expected transformations, the recursion and feedback of the system, the convergence of the system design and the innovation of the proposed methodology everyone: governments, industry, schools and universities.