Studyon Investment Decision Making Of R&D Project Based On Fuzzyrealoption

With the rapid development of global economic integration,the role of enterprise in the market has transferred from the traditional region into the current globe,which not only presents enormous opportunity for the development of the enterprise,but also brings about more fierce competition to it.How to occupy a place in the wave of globalization and realize the efficient transformation of the project of science and technological innovation has become an urgent problem to be solved.The research and product development activities(Research and Development,hereinafter referred to as R&D)of the enterprise are the premise of technological innovation.Technological innovation would never appear without enterprise R&D project investment.Therefore,the scientific investment decision of R&D project has become a prerequisite for technological innovation.In the traditional R&D project investment decision-making,the enterprise mainly assesses the value of the project through the risk discount method,and thus provides the decision basis for the decision-makers.However,it ignores a variety of uncertainties in the R&D project investment,which may result in the loss of investment opportunities of the promising R&D projects.In view of the shortcomings of the traditional investment decision-making theory,the real option theory can better cope with the uncertainties and regards the enterprise investment decision as a right rather than an obligation,thus,giving the enterprise more flexibility in decision making.However,the real option theory has been criticized for its disadvantages such as the practical application of the option value and the relative rigidity of the model variable.In this regard,the fuzzy real option theory may deal with the option value and variable selection by using fuzzy means which may further reduce the impact of the uncertainties on the R&D project and thus has become a scientific basis for decision-making.On this basis,this paper respectively introduces the R&D project investment decision-making process of the traditional theory,the real option theory,and the fuzzy real option theory,and selects a practical case to analyze the investment process.The results show that,for the selected case,the project can’t be invested if the investment assessment is made by using the traditional theory but it can be invested if the investment assessment is made by using real option theory and fuzzy real option theory.The difference is that,for the selected case,the assessment result of the fuzzy real option theory makes the case possess more investment value than that of the real option theory does,which ends up increasing the decision-making motive of thedecision-maker and realizing the efficient transformation of the project.The comparative results indicate that the optimal investment decision exists in the fuzzy option in the conditions of the expected cash flow and cost uncertainty.It is worth mentioning that,compared with the previous investment decision analysis of R&D project based on the fuzzy real option theory,this paper mainly uses the trapezoidal fuzzy number method to analyze the investment cost and the expected benefits of the fuzzy real option pricing model,which,to some extent,makes the assessment results more realistic,and the decision-making program more convincing.