@InProceedings{RochaDela:2007:UsReOp,
               author = "Rocha, Henrique Martins and Delamaro, Mauricio Cesar",
          affiliation = "{UNESP \& AEDB} and UNESP",
                title = "Product development process: using real options for assessments 
                         and to support the decision-making at decision gates",
            booktitle = "Proceedings...",
                 year = "2007",
               editor = "Loureiro, Geilson and Curran, Ricky",
                pages = "96--103",
         organization = "ISPE International Conference on Concurrent Engineering, 14. (CE 
                         2007).",
            publisher = "Instituto Nacional de Pesquisas Espaciais (INPE)",
              address = "S{\~a}o Jos{\'e} dos Campos",
             keywords = "real options theory, product development process, risk, investment 
                         decision making under uncertainty.",
             abstract = "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.",
  conference-location = "S{\~a}o Jos{\'e} dos Campos",
      conference-year = "2007, July 16-20",
             language = "en",
         organisation = "Instituto Nacional de Pesquisas Espaciais (INPE)",
                  ibi = "dpi.inpe.br/ce@80/2007/01.07.18.13",
                  url = "http://urlib.net/ibi/dpi.inpe.br/ce@80/2007/01.07.18.13",
           targetfile = "paper.pdf",
                 type = "Systems Architecting",
        urlaccessdate = "08 maio 2024"
}