FLEXIBILITY IN DESIGN - Title Page - MIT
FLEXIBILITY IN DESIGN - Title Page - MIT FLEXIBILITY IN DESIGN - Title Page - MIT
de Neufville + Scholtes D R A F T September 30, 2009Box 3.5_____________________________________________________________________________KEY PARADIGMIMPROVING A SYSTEM IN AN UNCERTAIN ENVIRONMENT MEANSMOVING ITS TARGET CURVE TO THE RIGHT,THUS MAKING THE ACHIEVEMENT OF TARGETS MORE LIKELY._____________________________________________________________________________Box 3.6_____________________________________________________________________________Summary of calculations for parking garage example[Table 3.7 here]_____________________________________________________________________________Part 1: Chapters 1 to 3 Page 58 of 69
de Neufville + Scholtes D R A F T September 30, 2009Table 3.1: Projected growth in demand for parkingYear 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Demand(spaces)750 893 1015 1120 1210 1287 1353 1410 1458 1500 1536 1566 1593 1615 1634Table 3.2: Spreadsheet for garage with 6 levels, based on projecteddemand (costs and revenues in millions)Year 0 1 2 … 15Demand (spaces) 0 750 893 … 1,634Capacity (spaces) 0 1,200 1,200 … 1,200Revenue 0.0 7.5 8.9 … 12.0Operating costs 0.0 3.6 3.6 … 3.6Land leasing and fixed costs 3.3 3.3 3.3 … 3.3Cash flow – actual -3.3 0.6 2.0 … 5.1Cash flow – discounted -3.3 0.5 1.7 … 1.2Cash flow – present value 26.7Capacity cost < two levels 6.8Capacity cost > two levels 17.4Net present value 2.5Table 3.3: Value in millions of different designs of the parking garage,based on projected demandDesignLevelsNPV4 - 1.25 2.26 2.57 - 0.7Part 1: Chapters 1 to 3 Page 59 of 69
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de Neufville + Scholtes D R A F T September 30, 2009Box 3.5_____________________________________________________________________________KEY PARADIGMIMPROV<strong>IN</strong>G A SYSTEM <strong>IN</strong> AN UNCERTA<strong>IN</strong> ENVIRONMENT MEANSMOV<strong>IN</strong>G ITS TARGET CURVE TO THE RIGHT,THUS MAK<strong>IN</strong>G THE ACHIEVEMENT OF TARGETS MORE LIKELY._____________________________________________________________________________Box 3.6_____________________________________________________________________________Summary of calculations for parking garage example[Table 3.7 here]_____________________________________________________________________________Part 1: Chapters 1 to 3 <strong>Page</strong> 58 of 69
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