Fuzzy multicriteria R&D project selection with a real options valuation model

Issue title: Fuzzy theory and technology with applications

Article type: Research Article

Authors: Tolga, A. Çagri

Affiliations: Galatasaray University, Industrial Engineering Department, 34357 Ortaköy Istanbul, Turkey

Note: [] Corresponding author. Tel.: +90212 2274480 Ext.433; E-mail: ctolga@gsu.edu.tr

Abstract: Real options valuation is a financial technique for evaluating investments under conditions of uncertainty, particularly uncertainty associated with market variables such as future product demand or the future value of an asset. The real option value of the investment opportunity is what a value-maximizing firm would pay the right to undertake the investment project with its inherent decision points. This paper proposes a fuzzy multi-criteria R&D project selection methodology based on the hierarchical fuzzy TOPSIS, which includes a fuzzy real options valuation model.

Keywords: Real options, fuzzy, TOPSIS, research and development projects, multi-criteria selection

Journal: Journal of Intelligent & Fuzzy Systems, vol. 19, no. 4-5, pp. 359-371, 2008