A COMPOUND OPTION MODEL OF PRODUCTION AND INTERMEDIATE INVENTORIES

dc.creatorCORTAZAR, G
dc.creatorSCHWARTZ, ES
dc.date.accessioned2024-01-10T13:10:50Z
dc.date.available2024-01-10T13:10:50Z
dc.date.created2024-01-10T13:10:50Z
dc.date.issued1993
dc.identifier10.1086/296616
dc.identifier0021-9398
dc.identifierhttps://doi.org/10.1086/296616
dc.identifierhttps://repositorio.uc.cl/handle/11534/77945
dc.identifierWOS:A1993ML19700002
dc.description.abstractThis article extend the option approach to valuing real assets by modeling the firm as a two-stage process with bounded output rates in which the output of the first stage may be held as work-in-process. In this setting, the real asset becomes a compound option. which, if exercised, gives the option to finish the work-in-process and sell the output as its final payoff. The existence of intermediate inventories may arise as an optimal investment strategy for exploiting possible future price increases. The framework allows us to analyze the effect of uncertainty on output rates and the effect of interest rates changes on inventory levels.
dc.languageen
dc.publisherUNIV CHICAGO PRESS
dc.rightsacceso restringido
dc.subjectINTERNATIONAL-TRADE
dc.subjectINVESTMENT
dc.subjectUNCERTAINTY
dc.subjectFLUCTUATIONS
dc.subjectHYSTERESIS
dc.subjectCAPACITY
dc.subjectRATES
dc.subjectRISK
dc.titleA COMPOUND OPTION MODEL OF PRODUCTION AND INTERMEDIATE INVENTORIES
dc.typeartículo


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