ESD.71, 1.146, 2.192, 3.56, 13.62, 16.861, 22.821, MIT School-Wide Elective

Professor Richard de Neufville and Dr. Frank R. Field

Syllabus

Fall, 2001

Part 1: Analysis Assuming Certainty |
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Sept | 6 | Thurs | 1 | Introduction to Course | |

Evaluation over time |
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11 | Tues | 2 | Engineering Economy | ||

13 | Thurs | 3 | Choice of Discount Rate | Field | |

18 | Tues | 4 | Implications and Issues | ||

System Modeling |
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20 | Thurs | 5 | Production Function | ||

25 | Tues | 6 | Cost Fcns/ Constrained Optimization | ||

27 | Thurs | 7 | Marginal Analysis | ||

Oct | 2 | Tues | 8 | Technical Cost Models Introduction | Field |

4 | Thurs | 9 | Technical Cost Models Application | Field | |

9 | *** Columbus Day Holiday*** | Holiday | |||

Optimization |
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11 | Thurs | 10 | Linear Programming | ||

16 | Tues | 11 | Linear Prog. Sensitivity Analysis | ||

18 | Thurs | 12 | Dynamic Programming | ||

23 | Tues | 13 | Optimization in Practice | ||

Part 2: Design for Uncertainty / Real Options |
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25 | Thurs | 14 | Risk is the Usual Reality | ||

30 | Tues | 15 |
***Quiz on Part 1*** |
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Decision and Utility Analysis |
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Nov | 1 | Thurs | 16 | Decision Analysis Basics | |

6 | Tues | 17 | Value of Information | ||

8 | Thurs | 18 | Introduction to Risk | ||

13 | Tues | 19 | Single Attribute Utility | ||

Real Options |
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15 | Thurs | 20 | Basic Concepts | ||

20 | Tues | 21 | Fundamental Calculations | ||

22 | *** Thanksgiving Holiday*** | Thanksgiving | |||

27 | Tues | 22 | Real Options | ||

29 | 23 | Option Value by Simulation | Scholtes (TBA) | ||

Dec | 4 | Tues | 24 | Option Value by Dynamic Programming | |

6 | Thurs | 25 | Hybrid Approaches in Practice | ||

11 | Tues | 26 | Summary and Closure to Course | ||

Week of 12th |
FINAL EXAMINATION |