Optimal investment decision making on the model of production enterprise with limited resources

Ivanenko, Tetiana; Hrushko, Viktor; Frantsuz, Anatolii

doi:10.21511/imfi.15(4).2018.05

Cited by 4 publications

(4 citation statements)

References 3 publications

(2 reference statements)

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“…The use of game theory (Zavadskas & Turkis, 2008;Roth & Wilson, 2019;Halperin, 2017;Peleckis, 2015), in particular the Savage criterion, the Wald criterion (Makarova, 2017;Ivanenko et al, 2018;Turskis et al, 2009;Kaklauskas et al, 2007;Zavadskas et al, 2002;Maron & Maron, 2019;Chursin et al, 2017;Gaspars-Wieloch, 2018;Korotkov et al, 2015), allows the best option to be chosen at this stage, without assigning a probability to each scenario (Ozerov, 2007).…”

Section: Methodsmentioning

confidence: 99%

Risk Management in Business Valuation in the Context of Digital Transformation

Пупенцова

Gromova

2021

Real Estate Management and Valuation

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The paper deals with business valuation in unstable conditions of the external environment. Economic recession and the need for digital transformation is coming to the fore in Russia. As a result of this, the valuation of assets and business acquires additional complexity and issues related to effective risk assessment become relevant. The main objective of this paper is to offer non-traditional methods of risk assessment for business valuation at the moment. The qualitative and quantitative risk analysis will help to improve the quality of the assessment reports of the property in an unstable period. The paper focuses on the non-traditional methods of risk assessment (Monte Carlo method, game theory) which must be used in determining the market value of the object of assessment in the current time. A practical example of using the simulation modeling method is given in detail. Summarizing, the use of the simulation modeling method for calculating the market value of the appraisal object will provide additional (compared to the standard method) information and increase the reliability of the results. Moreover, in the period of the coronavirus pandemic, this paper becomes even more relevant and important, seeing as how uncertainty is becoming inherent in countries around the world. Thus, this study is of value to researchers in the field of economic modeling and appraisers across the globe.

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Section: Methodsmentioning

confidence: 99%

Risk Management in Business Valuation in the Context of Digital Transformation

Пупенцова

Gromova

2021

Real Estate Management and Valuation

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“…Biyans'ka (2010) explores the issue of assessing the economic effectiveness of innovative projects taking into account the risk of their execution and the determinants of evaluating the characteristics of innovative projects and decision-making problems. Ivanenko, Hrushko, and Frantsuz (2018) analyze the choice of mutually exclusive projects that cannot be completed in parts. Therefore, one project should be selected and all other rejected.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic and management approach to defining effective projects for enterprise development under risks and uncertainty

Boiarynova

Kopishynska

Hryhorska³

2019

Problems and Perspectives in Management

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Enterprise development is dependent on the implementation of projects that contribute to improving economic performance. Considering this the need to apply the economic and management approach to the definition of effective projects under risks of reduced enterprise profitability due to the uncertain economic environment is justified. The study used scientific abstraction, formalization, causal relationship, time series analysis, variational range-based standardization, parameter minimization according to maximum and minimum values. The approach is created to evaluate the profitability dynamics of the production, management and finance subsystems of the enterprise, to monitor the deviations in the established corridor of their sufficient levels, to systematically control for the dynamics of the enterprise development to form the effective project portfolio, as well as to manage the risk reduction for projects that are inappropriate for development. The approach approbation, using Ukrainian machine-building enterprises as an example, has found enterprises with the level of development dynamics lower than the corridor determined. This indicates the risks of implementing inefficient projects and the need for systematic adjustment of their portfolio. The enterprises whose business operations belong to the fourth technological paradigm should implement projects to increase the profitability of the production and management subsystems, and those from the fifth paradigm should execute projects for the rise in the finance subsystem profitability.

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“…In order to create matrices of investment strategies, T. Ivanenko et al (2018) [20] believe that it is important to evaluate investment projects and make investment decisions on the basis of a number of financial criteria (NPV, DPP, РІ, and IRR) and risk criteria (Wald's maximin, Maximax, Hurwicz's criterion, Laplace's criterion, Bayes-Laplace insufficient reason criterion, Hodges-Lehmann criterion).…”

Section: Brief Literature Reviewmentioning

confidence: 99%

Approaches to project portfolio formation by pharmaceutical products producers

Derenska¹

2019

EA-XXI

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Introduction. The pharmaceutical market is characterized by a stable annual growth of 5-6%. According to the results of sales in 2018, the key domestic producers of pharmaceutical products were PJSC «Farmak» (the market share was 5.4%; the sales growth was 20.7%, compared to the previous year), Arterium Corporation (the market share-3.5%; the sales growth-17.6%), PrJSC «Pharmaceutical Firm «Darnitsa» (the market share-3.27%; the sales growth-15.3%), the Group of Companies «Zdorovya» (the market share-2.32%; the sales growth-12.4%). The successful functioning of a modern enterprise largely depends on its ability for sustainable development by means of introducing innovations, developing new products and adopting effective models of management. All these activities require that an enterprise adopts a project approach. As the number of projects is growing, alongside with their cost and life cycle, it is becoming increasingly important to implement the concept of portfolio management. The present research outlines different approaches to creating a project portfolio and describes instruments that can help enterprises select an effective combination of projects in a portfolio. The object of the research is the project activity of a «Pharmaceutical Company «Zdorovya». In order to achieve the purpose of the research, the author applies multiple criteria weighted ranking and cluster analysis. Methods. Multiple criteria weighted ranking is used on the first stage of project evaluation in order to define its ranking (priority). The method of multidimensional classification, as well as cluster analysis in particular, is used to divide all the projects into groups. The advantage of cluster analysis lies in the fact that it allows businesses to group projects according a great number of miscellaneous parameters. Joining (tree clustering) and K-means clustering methods are employed with the help of STATISTICA software. Ward's method as amalgamation (linkage) rule and Euclidean distances as distance measure are also applied as methods of cluster formation. Results. Project ranking based on the level of risk, the investment cost, the net present value, the profitability index and the discounted payback period allowed the author to define the priority of each project and suggest recommendations as to how they should be included into the portfolio of projects. Nine projects were considered in order to create a project portfolio for a pharmaceutical enterprise. Multiple criteria weighted ranking shows that Project 3 has the highest priority. The conducted clasterisation revealed three clusters of projects that characterise different directions in the process of starting a modern pharmaceutical manufacturing facility (Cluster 3), launching a new medicine into the market (Cluster 2) and expanding the existing range of products (Cluster 1). Conclusion. While forming a project portfolio, it appears worthwhile to use a combination of three parameters: risk, effectiveness and cost. Additively, which is characteristic of net present value...

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Optimal investment decision making on the model of production enterprise with limited resources

Cited by 4 publications

References 3 publications

Risk Management in Business Valuation in the Context of Digital Transformation

Risk Management in Business Valuation in the Context of Digital Transformation

Economic and management approach to defining effective projects for enterprise development under risks and uncertainty

Approaches to project portfolio formation by pharmaceutical products producers

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