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Improving corporate investment decision through decision risk analysis and value of information method


Arfah, Andy (2014) Improving corporate investment decision through decision risk analysis and value of information method. In: 4th International Conference on Technology and Operations Management (ICTOM04), 18-19 August 2014, Kuala Lumpur, Malaysia.

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Abstract

This paper focus on how Decision Risk Analysis and VOI have been used to improve corporate investment decision on oil field development at PT. X.Decision and risk analysis is an ideal tool for decision making in an environment of risk and uncertainty.The process enables a more holistic view to be made within the context of the overall objective to get clear understanding of the oilfield asset development.In the petroleum industry, the decision to develop new field must be made under conditions of uncertainty.The degree of uncertainty and the economic consequences that associated with such investment decisions can vary widely.Fail in performing good decision could lead to inefficient of a multi-billion dollar capital investment and will ultimately affect the financial performance of the firm. Although uncertainty can always be reduced by simply buying more information, there must be a point at which the cost of additional information exceeds its benefit.This paper examines the problem of determining the point at which the development decision should be made.A complex decision problem is composed into separate components, form of a decision tree, on which perceptions of options, uncertainties and values can be explicitly represented.The methodology is applied to a real green-field development in Riau-Sumatera.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Organized by: School of Technology Management and Logistics, Universiti Utara Malaysia, Prince of Songkla University (PSU) & Institut Teknologi Bandung (IPB)
Uncontrolled Keywords: Corporate Performance, Decision Analysis, Value of Information, Risk and Uncertainty
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: School of Business Management
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 25 Oct 2015 03:00
Last Modified: 17 Apr 2016 07:31
URI: http://repo.uum.edu.my/id/eprint/15951

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