Using Stranded Assets Analysis to Inform Distributed Incremental System Design
Harper, Steven Russell
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Permalink
https://hdl.handle.net/2142/87079
Description
Title
Using Stranded Assets Analysis to Inform Distributed Incremental System Design
Author(s)
Harper, Steven Russell
Issue Date
2006
Doctoral Committee Chair(s)
Thurston, Deborah L.
Department of Study
Systems and Entrepreneurial Engineering
Discipline
Systems and Entrepreneurial Engineering
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Engineering, System Science
Language
eng
Abstract
This is a study that examines a basic problem in product development of how a manager or designer chooses which qualities for the product that he or she is offering to the marketplace. However, the context of this study is not that of new product development, rather the modification of the attributes of a product that is currently being produced and sold. The study explores strategic investment decisions in new technologies that are used for product production. Often in the current paradigm, local production plant managers are assessed according to the mantra of what has your plant bottom line been lately and what are your short-term projections. Methodologies are developed that can look beyond this single attribute with a short planning horizon to allow local manages to understand how the choices they make impact the overall market system of their product. The product investigated is electrical power, which exists in a networked system of ten bus managers. These managers are given a choice of when to replace the electrical power generators on their busses to affect the economic cost, environmental impact, and reliability of the electricity they produce. Using stranded assets analysis, attribute flow diagrams, and network analysis, the local managers are able to make better strategic investment decisions. Findings were that stranded assets analysis led to better decisions; that attribute flow diagrams allowed temporal analysis of environmental impact and reliability, in addition to economic analysis; and, that there are limitation to multiattribute utility analysis when the market consists of a network of producers. Although using cooperative information structure was investigated, results were inconclusive. Several alternatives to utility theory were used were promising in helping managers make investment decision in a networked environment---including simulated output distribution analysis and game theory approaches. The hypothesized rebound effect---where an action that looks favorable to local mangers, once inputted into the network, might actual hurt the outcome for the injecting manager---was shown. Altogether, this study has highlighted the need for local manages to broaden their horizons spatially, temporally, and characteristically to ensure that they can make better decisions.
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