IT Project Investment Decision Analysis under Uncertainty

DOI

10.2991/icebi.2010.44How to use a DOI?

Keywords

IT investment evaluation, Real options, Dynamic Programming, Stochastic Process 1. Introduction Since the 1990s, information technology represented by computer has been widely used in business management, design and manufacturing. Information investments of enterprises in financial management, mana

Abstract

When to implement IT investment is important, the revenue and cost of IT investment are flustering with great uncertainty, so defining rational their variation is the base for assessing the value and occasion of IT investment. The IT investment cost is described by geometrical Brownian motion, and the income is described by geometrical Brownian motion with jump. The theory of real option is applied considering value of wait. With Dynamic Programming, the IT investment decision model is based on that the investment and its income are stochastic. The best investment time and option value are defined by solution of the decision making model and it will help making correct decision of enterprises.

Copyright

© 2010, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Suling Jia
AU  - Na Xue
AU  - Dongyan Li
PY  - 2010/12
DA  - 2010/12
TI  - IT Project Investment Decision Analysis under Uncertainty
BT  - Proceedings of the 1st International Conference on E-Business Intelligence (ICEBI 2010)
PB  - Atlantis Press
SP  - 310
EP  - 316
SN  - 1951-6851
UR  - https://doi.org/10.2991/icebi.2010.44
DO  - 10.2991/icebi.2010.44
ID  - Jia2010/12
ER  -