Infrastructure Managemeng Group (IMG), Institute of Infrastructure and Construction Management (IBI), Swiss Federal Institute of Technology (ETH), Zürich, Switzerland
Infrastructure Managemeng Group (IMG), Institute of Infrastructure and Construction Management (IBI), Swiss Federal Institute of Technology (ETH), Zürich, Switzerland
In this paper, a real option approach to determine the optimal time to execute interventions on rail infrastructure, when it is not known for certain which intervention is to be executed, is presented (i.e. the optimal intervention window). Such an approach is useful in the management of rail infrastructure that belongs to a multi-national rail corridor where multiple railway organizations, ideally, should coordinate their maintenance interventions, years in advance, to minimize service disruptions. The approach is based on an adaptation of the Black and Scholes differential equation model used to value European call options in financial engineering. It is demonstrated by determining the optimal intervention window for infrastructure in a fictive rail corridor.
Lethanh, N., & T. Adey, B. (2015). A real option approach to determine optimal intervention windows for multi-national rail corridors. Journal of Civil Engineering and Management, 22(1), 38-46. https://doi.org/10.3846/13923730.2014.994030
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
