%0 Conference Proceedings
%@holdercode {isadg {BR SPINPE} ibi 8JMKD3MGPCW/3DT298S}
%@usergroup administrator
%@usergroup hmartins@aedb.br
%@usergroup administrator
%3 paper.pdf
%J São José dos Campos
%I Instituto Nacional de Pesquisas Espaciais (INPE)
%B ISPE International Conference on Concurrent Engineering, 14 (CE 2007).
%9 Systems Architecting
%P 96-103
%X Enterprises need continuous product development activities to remain competitive in the marketplace. Their product development process (PDP) must manage stakeholders needs - technical, financial, legal, and environmental aspects, customer requirements, Corporate strategy, etc. -, being a multidisciplinary and strategic issue. PDPs are usually broken into sequential stages (or phases), so that requirements can be checked against plans to evaluate the process alignment and trends towards the objectives. Checkpoints between phases involve go/no go decisions, leading the process towards later management decisions or terminating projects that do not offer good chances of revenue/profits to the company, nor opportunities for a better strategic positioning. The present article is intended to study PDP methodologies, mainly return and risk concepts, methodologies, best practices, and working models to maximize the expected return value of the investments in product development. In the corporate finance literature, the value of a risky project is calculated by the net present value (NPV) of its cash flows, discounted at a discount rate that reflects the project risk: such method is not able to capture the management flexibility along the decision-making process. Several methods have been proposed to value such situation, including decision trees, but the appropriate risk-adjusted discount rate is still virtually indeterminate. The real option valuation method is often presented as an alternative to the conventional NPV approach, calculated using the same principals of financial options: the right to buy or sell a financial value (mostly a stock) for a predetermined price, with no obligation to do so. Options associated with non-financial investment opportunities are called "real options": a multi-period approach that takes into account the flexibility of, for instance, being able to postpone prototyping and design decisions, waiting for more information under uncertainty in technologies, customer acceptance, funding, etc. In the present article, the state of the art of real options theory is prospected and a link between the diverse methodologies of PDP and real options theory are searched, mainly focused on decision processes along the project and product lifecycle, towards the expected investment return. A model to use the real options theory is proposed, so that pricing can be properly considered at each project phase of the product development. Conclusion is that such model can provide more robustness to the decisions processes within PDP.
%@session poster
%E Loureiro, Geilson,
%E Curran, Ricky,
%T Product development process: using real options for assessments and to support the decision-making at decision gates
%@electronicmailaddress hmartins@aedb.br
%@electronicmailaddress delamaro@feg.unesp.br
%@format Print; CD-ROM; On-line.
%K real options theory, product development process, risk, investment decision making under uncertainty.
%@secondarytype CI
%8 2007, July 16-20
%@e-mailaddress hmartins@aedb.br
%@mark 1
%2 dpi.inpe.br/ce@80/2007/01.07.18.13.40
%@affiliation UNESP & AEDB
%@affiliation UNESP
%@subject Systems management (value, risk, cost and schedule)
%4 dpi.inpe.br/ce@80/2007/01.07.18.13
%D 2007
%1 Instituto Nacional de Pesquisas Espaciais (INPE)
%S Proceedings
%A Rocha, Henrique Martins,
%A Delamaro, Mauricio Cesar,
%C São José dos Campos
%@area ETES