Professor Richard de Neufville

Prof. Richard de Neufville is Professor of Engineering Systems and of Civil and Environmental Engineering at MIT.  At Cambridge, he is a Visiting Fellow at Clare Hall.  He has received numerous MIT and international awards for his contributions to Engineering Systems Analysis and the development of the field of Technology Policy.  From 1975 to 2000, he was the Founding Chairman of the MIT Technology and Policy Program.  For details, please see his personal web page: 

http://cee.mit.edu/deneufville  
 

Doctor Stefan Scholtes

Dr. Stefan Scholtes is a Professor of Management Science at the Judge Institute of Management, Cambridge University's Business School. Management Science is a discipline which applies mathematical and computer modelling methodology to management problems with an emphasis on issues related to uncertainty, choice, complexity and change. Dr Scholtes' main contributions to research are in the area of optimization models. His papers combine fundamental research on the design and mathematical analysis of algorithms with applications in health care and traffic management. For details, please see his personal web page: 

http://www.jims.cam.ac.uk/people/faculty/sscholtes.html

Subject Overview

"Real Options for Engineering Systems" addresses the issue of how to evaluate flexibility in the design of technological developments such as air transport, communication networks, manufacturing facilities, oil fields, power grids, etc.  It focuses on the evaluation of "real options" that adapt the financial methods of options analysis to the realities of system design.  Since until now there have been no effective methods to evaluate flexibility in design, many people believe that the "real options" approach will change engineering practice fundamentally.  In any case, research and practice in real options are expanding rapidly. 

The subject represents a version of the MIT subject entitled "Engineering Systems Analysis for Design" (ESD.71), with adjustments to reflect the realities of academic schedules and practices at Cambridge University.  At MIT, the subject is offered as a School-Wide Elective to all first year post-graduate engineering students. The material is available at the University of Cambridge in England in association with the co-operative relationship between MIT and the Judge School of Management.