• IE interfaces
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• v.18 no.2
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• pp.184-192
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• 2005

In recent research there has been intense interest in understanding how real option valuation (ROV) approaches might usefully complement conventional discounted cash flow (DCF) techniques. However, investment decision makers in a real world have been worried about adopting the ROV approaches mainly because of difficulty in technically understanding the theory of the ROV approaches as indicated by many researchers. With this difficulty in mind, we propose the opportunity cost model as another discrete-time model to value a deferral option. The main advantage of observing a real options value in terms of the opportunity cost concept is to provide a technique for practitioners to estimate a wide range of real options values without sticking to a financial option modelling. The fundamental ground for developing the opportunity cost model proposed in this paper lies in the work of dissecting the structure of the real options value into three categories: capital gain, expected opportunity loss, and expected opportunity gain. At the end of the paper, we will present a short illustrative example to demonstrate the applicability of the model.

• Proceedings of the KIEE Conference
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• 2005.07a
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• pp.751-753
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• 2005

In this raper, Economic value of reserve margin i.i presented by opportunity cost for Korean power system, and the level of compensation for spinning reserve that is necessary to operate power system stably is proposed. The generator that is giving up for opportunity to participate in energy market must take opportunity cost. it is relative to not only whole demand level but also marginal cost of each resource. In this paper, assume that all resource in Korea is equivalent to six generator for simulation. and we evaluate value of reserve in the time of high demand and low demand. Also we propose the way to improve a evaluation method by examine relationship between capacity payment and value of reserve.

• Proceedings of the Korea Society of Design Studies Conference
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• 2005.10a
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• pp.232-233
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• 2005

• Journal of Korean Institute of Industrial Engineers
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• v.29 no.2
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• pp.126-134
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• 2003

Among a variety of models proposed by so far to calculate the real options value when the investment decision about the underlying project may be delayed, the Black-Scholes and the binomial lattice models have been widely used and discussed by academics and practitioners. However these two models do not provide us with intuition into how it is constructed and what it does really mean. In this paper, we will therefore explore its components and practically more intuitive meaning. With the components explored, we developed the mathematical model to calculate the real options value and thus strategic net present value, based on the opportunity cost concept, for which the investment decision about the underlying project is postponed by one year. We will finally present a short illustrative example for readers better understanding on the model proposed in the paper.

• The Journal of Information Systems
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• v.33 no.1
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• pp.133-157
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• 2024

Purpose The purpose of this study is to identify the utility and sacrifice factors of paid membership in domestic e-commerce based on the value-based acceptance model, and to determine its impact on perceived value and intention to continue using e-commerce. Design/methodology/approach This study confirmed the perceived benefits and sacrifice factors of e-commerce paid membership through in-depth interviews, and verified the research model through an online survey. Findings The study identifies seven perceived benefit factors(differentiation, enjoyment, sharing, point benefit, discount benefit, contents benefit, and delivery benefit) and three perceived sacrifice factors(fee, opportunity loss, complexity). Structural model verification reveals that discount benefit, delivery benefit, and opportunity loss significantly impact the perceived value in Coupang Rocket Wow, while discount benefit, point benefit, and fee significantly influence the perceived value in Naver Plus membership. The perceived value of both memberships positively influences the intention to continue using the respective e-commerce platforms. A comparison highlights a significant difference in the impact of opportunity loss on perceived value between Coupang Rocket Wow and Naver Plus memberships.

• New & Renewable Energy
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• v.7 no.2
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• pp.18-27
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• 2011

Management flexibility to adapt its future actions in response to altered future market conditions can expand the value of an investment opportunity by improving its upside potential without the change in the downside losses. Module manufacturers in solar industry continuously have to decide how much and when its production capacity should be expanded with regards to the demand in the global markets. Either over- or under-investment can cause sunk and/or opportunity costs to the module manufacturers. Option of exercising the additional investments only on favorable opportunities can increase total value of the investment. This paper analyzes the case which shows that the expansion of production capacity with more expandibility can have more value than the rigid plan of capacity expansion. The expansion option value is equivalent to KRW 38.286 billion, thus switching the negative NPV of the initial investment opportunity into the positive value. High volatility and the high growth in the cashflows as the major business features of the renewable energy provide condition where real options can play the crucial role in increasing the investment value as well as in determining the size and timing of capacity expansion in the course of capital budgeting process.

• Journal of the Korean Institute of Landscape Architecture
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• v.31 no.4
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• pp.57-66
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• 2003

The purpose of this study is to evaluate the resource value of existing mud flats in JANGWHARI, KANGWHADO, as strategies for ecotourism. The research methods used in this study are Limits of Acceptable Change(LAC), and Recreation Opportunity Spectrum(ROS). The LAC process draws attention to the existing area conditions that are judged to be acceptable. Managers must define desired area conditions and undertake actions to maintain or achieve these conditions. The ROS is within each of the recreation opportunity classes identified as being used at the regional level. The Results of this study are as follows: 1) The Opportunity Class of the ROS is ecological, physical, social, managerial setting as primitive, semi-primitive. non-motorized, semi-primitive$.$motorized, and roaded natural. 2) The indicator of the LAC is ecological, physical, social, and managerial setting; the indicator of ecological is wildlife populations, water quality, road paving; the indicator of physical is facilities; the indicator of social is visitor needs for knowledge, adventure, eco-experience, and environmental education programs; and, the indicator of managerial is limits of law, and degree of management. 3) Currently, the Opportunity Class of the ROS of JANGWHARI, KANGWHADO is levels II-III, and the Opportunity Class of the suggested ROS is levels I-II. 4) This paper describes strategies for mud flat area management: detection of water quality, resolving problems of equipment, supply of both environmental education programs and guide equipment.

• Journal of the Korean Operations Research and Management Science Society
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• v.26 no.4
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• pp.83-97
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• 2001

Net Present Value (NPV) criterion has been the most widely used criterion to evaluate investment opportunities. However, the analysis based on the NPV criterion falls to consider the managerial flexibility of deferring decisions until major uncertainty is resolved. Recently, real options method attracted a lot of attention as a Powerful approach to address the problem. If investment decision is deferred, the value of the investment opportunity increases but opportunity cost increases at the same time. Therefore, it is important to decide the optimal timing how long the decision can be deferred. In this paper, we developed a model deciding the optimal decision timing. Using the real options approach, the model derived the optimal deferring time until a decision is made. Then, the model was applied to a Korean mobile telecommunications company who wants to invest on the wireless resale business. We believe that this model would be very useful to overcome the problem of NPV decision criterion. With this approach, we can make contingent decisions based on the observation of uncertainly resolutions.

• Korean Medical Education Review
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• v.22 no.1
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• pp.16-27
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• 2020

The accreditation process (AccP) is both an opportunity and a burden for medical schools-which one it becomes depends on how medical schools recognize and utilize the AccP. In other words, if a medical school recognizes the AccP only as a formal procedure or as a means for continuing medical education, it will be a burden for the medical school. However, if a medical school recognizes the real and positive value of the AccP, it can be both an opportunity and a tool for developing medical education. The educational value of the AccP is to improve the quality, equity, and efficiency of medical education, along with increasing the options of choice. In order for the AccP to contribute to the development of medical education, accrediting agencies and medical schools must first be recognized as part of an "educational alliance" working together towards common goals. Secondly, clear guidelines on the accreditation standards should be periodically reviewed and shared. Finally, a formative evaluation using self-evaluation as a system that can utilize the AccP as an opportunity to develop medical education must be introduced. This type of evaluation system could be developed through collaboration among medical schools, academic societies for medical education, and the accrediting authority.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.45 no.4
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• pp.167-173
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• 2022

Investors must adopt profitable investment opportunities to maximize their wealth. Almost all investment, finance, engineering economics textbooks explain that net present value (NPV) measures the profitability (or value) of investment opportunities in absolute size, and internal rate of return (IRR) measures the profitability of investment opportunities in relative proportions. However, NPV is a measure of the relative size of the return on investment opportunity to do-nothing alternative. Moreover, IRR can occur in multiple investment opportunities and may not exist. To make matters worse, IRR and NPV also have conflicting problems in accept-or-reject decisions. In this study, the reason why NPV and IRR cannot accurately measure the profitability of investment opportunities is identified, and fundamental characteristics that investment opportunity profitability measures should have are presented.