One of the major limiting factors and criticism about the real options approach is related to issues with estimating the right input values for state variables that are critical to make the right investment decisions under uncertainty. While vast research exists that applies real options valuation to technology investments, scholars often present theoretical findings based on fictional numerical applications neglecting the process of estimating the right input variables for their models. We present a simple framework to obtain these variables for technology investments by analysing publicly available data such as bibliometrics and patents related to any technology and apply it to forecast 3D printing technology diffusion. We base our approach on the Bass model, which is a prominent technique in the area of technology forecasting and show that these methods can help to forecast technology diffusion and obtain the required input parameters for technology investment decisions. We further use our 3D printing example to demonstrate the major differences between the suggested technology diffusion model and a standard Geometric Brownian Motion (GBM) model, as it is often found in Real Options literature. We find that the GBM is often not suitable when analysing technology investments, as it can lead to wrong investment decisions.
In this paper, we consider fuzzy matrix games, namely, two-person zero-sum games with fuzzy payoffs. For such games, we define three kinds of concepts of minimax equilibrium strategies based on fuzzy max order, and their properties are investigated. Then, these minimax equilibrium strategies are characterized as Nash equilibrium strategies of a family of parametric bi-matrix games with crisp payoffs, where ecrisp’ means enon-fuzzy’. Moreover, numerical examples are presented to illustrate utility of the obtained results.
This paper develops a bi-objective model for determining the location and shape of two finite-size facilities. The objectives are to minimize both the closest and barrier distances. The former represents the accessibility of customers, whereas the latter represents the interference to travelers. The total closest and barrier distances are derived for two rectangular facilities in a rectangular city where the distance is measured as the rectilinear distance. The analytical expressions for the total closest and barrier distances demonstrate how the location and shape of the facilities affect the distances. A numerical example shows that there exists a tradeoff between the closest and barrier distances. The tradeoff curve provides planners with alternatives for the location and shape of the facilities. The Pareto optimal location and shape of the facilities are then obtained.
The vertex coloring problem is a well-known NP-hard problem and has many applications in operations research and in scheduling. A conventional approach to the problem solves the k-colorability problem iteratively, decreasing k one by one. Whether a heuristic algorithm finds a legal k-coloring quickly or not is largely affected by an initial solution. We highlight a simple initial solution generator, which we call the recycle method, which makes use of the legal (k+1)-coloring that has been found. An initial solution generated by the method is expected to guide a heuristic algorithm to find a legal k-coloring more quickly than conventional methods, as demonstrated by experimental studies. The results suggest that the recycle method should be used as the standard initial solution generator for both local search algorithms and modern hybrid methods.