Real option Analysis (ROA) is acknowledged as a powerful tool to evaluate uncertain projects whose uncertainty depends heavily on alternatives available along the project life. The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting the optimal R&D product portfolio from a set of candidate drugs. This model is quiet easy to implement in a spreadsheet, as shown in developed application able to solve an actual pharmaceutical portfolio selection case study.

Enea, G., Lo Nigro, G. (2011). An affordable way to implement real options to select optimal R&D portfolio. In 22nd Annual POMS Conference, Operations Management the Enabling Link.

An affordable way to implement real options to select optimal R&D portfolio

LO NIGRO, Giovanna
2011-01-01

Abstract

Real option Analysis (ROA) is acknowledged as a powerful tool to evaluate uncertain projects whose uncertainty depends heavily on alternatives available along the project life. The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting the optimal R&D product portfolio from a set of candidate drugs. This model is quiet easy to implement in a spreadsheet, as shown in developed application able to solve an actual pharmaceutical portfolio selection case study.
Settore ING-IND/35 - Ingegneria Economico-Gestionale
2011
22nd Annual POMS Conference, Operations Management the Enabling Link
2011
00
Enea, G., Lo Nigro, G. (2011). An affordable way to implement real options to select optimal R&D portfolio. In 22nd Annual POMS Conference, Operations Management the Enabling Link.
Proceedings (atti dei congressi)
Enea, G; Lo Nigro, G
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10447/61929
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