Valuation of Design Adaptability in Aerospace Systems

As more information is brought into early stages of
the design, more pressure is put on engineers to
produce a reliable, high quality, and financially
sustainable product. Unfortunately, requirements
established at the beginning of a new project, and
their environment, continue to change in some
unpredictable ways. Robust Design Simulation is a
method that addresses the risk of a new design
falling out of value at early stages of production.
Under certain conditions, this method fails to
account for the intrinsic value embedded in the
system when certain design features are activated.
This book introduces the concepts of adaptability
and real options to manage risk foreseen in the face
of uncertainty at early design stages. The results
presented in the study contained herein show the
benefits of real options analysis during the design
process of aerospace systems. These include: a
better management of design features over time, a
better view of uncertainty around future technology
economics, a good understanding of adaptability
value over time, and a consistent risk reduction
with respect to alternatives in which flexibility
was not embedded.

Autorentext

Dr. Fernández is currently a Risk Analyst for GE Energy, where heevaluates the benefits and risks of retrofitting new technologiesinto gas turbines for power generation. He earned a PhD and MBAat Georgia Institute of Technology after obtaining significantknowledge in the areas of aircraft design methods and real options in engineering.

Klappentext

As more information is brought into early stages ofthe design, more pressure is put on engineers to produce a reliable, high quality, and financially sustainable product. Unfortunately, requirements established at the beginning of a new project, andtheir environment, continue to change in some unpredictable ways. Robust Design Simulation is a method that addresses the risk of a new designfalling out of value at early stages of production. Under certain conditions, this method fails toaccount for the intrinsic value embedded in the system when certain design features are activated. This book introduces the concepts of adaptability and real options to manage risk foreseen in the face of uncertainty at early design stages. The results presented in the study contained herein show the benefits of real options analysis during the design process of aerospace systems. These include: a better management of design features over time, a better view of uncertainty around future technologyeconomics, a good understanding of adaptability value over time, and a consistent risk reductionwith respect to alternatives in which flexibilitywas not embedded.