A Practical Procedure to Implement an Incremental Investment Strategy with Prueitt-Park Methodology
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Engineering projects of today such as machine/equipment replacement projects involving advanced manufacturing systems have been analyzed and implemented in more complex and uncertain investment environment. Thus, company managers in charge of making a final investment decision feel a heavy management burden and want to, to some extent, be free from such burden. As a result, there exists a high likelihood that the company may lose an opportunity to make a good fortune. To enhance the opportunity reducing the burden imposed on the managers, Prueitt and Park among many researchers proposed an excellent methodology of analyzing and launching those engineering projects incrementally, using a Bayesian theory, in a situation at which a certain number of conditions were satisfied. However, the methodology presented in their paper is extremely difficulty for readers, especially those who are interested in practicing it in a real field, to follow up. So, this paper is concerned with reinterpreting and representing the methodology so as to be practicable in the field. This work will be described step-by-step in a detail with the case study in Prueitt and Park’s paper.
Abstract
Engineering projects of today such as machine/equipment replacement projects involving advanced manufacturing systems have been analyzed and implemented in more complex and uncertain investment environment. Thus, company managers in charge of making a final investment decision feel a heavy management burden and want to, to some extent, be free from such burden. As a result, there exists a high likelihood that the company may lose an opportunity to make a good fortune. To enhance the opportunity reducing the burden imposed on the managers, Prueitt and Park among many researchers proposed an excellent methodology of analyzing and launching those engineering projects incrementally, using a Bayesian theory, in a situation at which a certain number of conditions were satisfied. However, the methodology presented in their paper is extremely difficulty for readers, especially those who are interested in practicing it in a real field, to follow up. So, this paper is concerned with reinterpreting and representing the methodology so as to be practicable in the field. This work will be described step-by-step in a detail with the case study in Prueitt and Park’s paper.
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