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Construction Management and Economics Volume 22, 2004 - Issue 2
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Original Articles

Valuing a price cap contract for material procurement as a real option

Francis P. Ng Department of Management Science and Engineering, Stanford University, Palo Alto, CA 94305, USA
,
Hans C. Björnsson Center for Integrated Facility Engineering, Department of Civil and Environmental Engineering, Stanford University, Palo Alto, CA 94305, USAView further author information
&
Samuel S. Chiu Department of Management Science and Engineering, Stanford University, Palo Alto, CA 94305, USA
Pages 141-150 | Received 16 Jul 2002, Accepted 08 May 2003, Published online: 13 May 2010

Citations (19)

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Read on this site (7)

Michael J. Garvin & David N. Ford. (2012) Real options in infrastructure projects: theory, practice and prospects. Engineering Project Organization Journal 2:1-2, pages 97-108.
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JustinE. Weidman, KevinR. Miller, JayP. Christofferson & JayS. Newitt. (2011) Best Practices for Dealing with Price Volatility in Commercial Construction. International Journal of Construction Education and Research 7:4, pages 276-293.
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JamesP. Smith, Kevin Miller, Jay Christofferson & Mark Hutchings. (2011) Best Practices for Dealing with Price Volatility in Utah's Residential Construction Market. International Journal of Construction Education and Research 7:3, pages 210-225.
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Guo-Xing Zhang, Peng Wang, Ju-E Guo, Guorong Chai & Peng Liu. (2011) Non-competition Guaranteed value and effect on the Toll Road Project. Transport 26:2, pages 178-184.
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Z. Qin & J. Yang. (2008) Analysis of a revenue-sharing contract in supply chain management. International Journal of Logistics Research and Applications 11:1, pages 17-29.
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MahdiH. Mattar & CharlesY. J. Cheah. (2006) Valuing large engineering projects under uncertainty: private risk effects and real options. Construction Management and Economics 24:8, pages 847-860.
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CharlesY. J. Cheah & Jicai Liu. (2006) Valuing governmental support in infrastructure projects as real options using Monte Carlo simulation. Construction Management and Economics 24:5, pages 545-554.
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Articles from other publishers (12)

Soojin Yoon, Choungryeol Lee, Nader Naderpajouh & Makarand Hastak. (2023) A real option budget framework for asset management funding models in higher education institutions. Journal of Building Engineering 80, pages 107719.
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Tadahiro Nakajima & Shigeyuki HamoriTadahiro Nakajima & Shigeyuki Hamori. 2022. Energy Trading and Risk Management. Energy Trading and Risk Management 123 130 .
Mostafa Mir, H.M. Dipu Kabir, Farnad Nasirzadeh & Abbas Khosravi. (2021) Neural network-based interval forecasting of construction material prices. Journal of Building Engineering 39, pages 102288.
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Afshin Firouzi & Mohammad Vahdatmanesh. (2019) Applicability of Financial Derivatives for Hedging Material Price Risk in Highway Construction. Journal of Construction Engineering and Management 145:5.
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Ho-Hyun Jeong, Eul-Bum Lee & Douglas Alleman. (2018) Ore Composition’s Impact on Smelting Profitability: An Optimum Pricing Index Model for Long-Term Nickel Ore Feedstock Purchasing Agreements. Applied Sciences 8:11, pages 2100.
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Alireza Joukar, Isabelina Nahmens & Craig Harvey. (2016) An AHP-Based Selection Model for Ranking Potential Strategies for Managing Construction’s Cost Volatilities. An AHP-Based Selection Model for Ranking Potential Strategies for Managing Construction’s Cost Volatilities.
Iman MirzadehBjorn Birgisson. (2016) Evaluation of Highway Projects under Government Support Mechanisms Based on an Option-Pricing Framework. Journal of Construction Engineering and Management 142:4.
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Sanghyo Lee, Baekrae Lee, Juhyung Kim & Jaejun Kim. (2013) A Financing Model to Solve Financial Barriers for Implementing Green Building Projects. The Scientific World Journal 2013, pages 1-10.
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Guoxing Zhang, Guorong Chai, Ju-e Guo, Peng Wang & Yong Xue. (2010) Non-competition Guarantee Value Model Research Based on Real Option. Non-competition Guarantee Value Model Research Based on Real Option.
Hiroto Asakawa. (2010) Real Option Analysis of Price Adjustment System for Gas Distribution. Journal of Real Options and Strategy 3:1, pages 63-76.
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Qingbin Cui, Philip Johnson, Aaron Quick & Makarand Hastak. (2008) Valuing the Warranty Ceiling Clause on New Mexico Highway 44 Using a Binomial Lattice Model. Journal of Construction Engineering and Management 134:1, pages 10-17.
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João Adelino Ribeiro, Paulo Jorge Pereira & Elísio Fernando Moreira Brandão. (2013) Reaching an Optimal Mark-Up Bid through the Valuation of the Option to Sign the Contract by the Selected Bidder. SSRN Electronic Journal.
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