Purpose: The goal of this paper is to find the best production strategy for product portfolio,\udwhich means the largest value of the options. And finally, give a case and find the solution of\udthe optimal production strategy for product portfolio.\udDesign/methodology/approach: This article, based on the production with characteristics\udof a call option and 0-1 integer programming model, build new-product portfolio strategy, and\udthrough case demonstrate that traditional method underestimates the value of the product\udportfolio.\udFinding: According to market being volatility and uncertainty and the production can being\uddelayed, firms can flexibly arrange the best time for products to manufacture. Use real options\udtheory to analyze product decision and the best production timing decision. Find the total\udoptions value is higher than the traditional methods.\udResearch limitations/implications: We are not applied to real option pricing theory in\udmodular flexible production system. We just applied real option pricing theory to the product\udplatform. The basic model need to improve. While the thinking of this paper provides some\udresearch ideas for flexible production systems based on real option in further research.
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