CUED undergraduate teaching site

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2024-25

Module Leader

Lecturer

Lab Leader

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% in project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g., http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; and plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

There will be an introduction session of the course in October 2024.

Module Time: 3 full days (9.00am – 5.00pm) on 9^th, 11^th, and 13^th December 2024.
Reserve 9^th – 16^th December 2024 for TPE25 ONLY.
Reserve 14^th and 15^th December 2024 to conduct part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment on 16^th December 2024.
It is necessary for you to have a Window-based or MacOS laptop for Excel modelling. There is a possibility that students use computers in the computer lab. If you do not have a laptop, be prepared to stay in Cambridge for a few more days after 16^th December 2024 so that you can conduct Excel modelling in relation to your course assessment in the CJBS Computer Lab – subject to the availability of the lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

de Neufville, R. and Scholtes, S. (2011), Ch 2: "Recognition of Uncertainty".
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’.

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files Anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2025. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

Anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2025.

Marks will be available in three-four weeks after the submission date.

Booklists

Please refer to the Booklist for Part IIB Courses for references to this module, this can be found on the associated Moodle course.

Module Webpage

To be advised: https://www.vle.cam.ac.uk

TPE25 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book: https://ebookcentral.proquest.com/lib/CAM/detail.action?pq-origsite=prim... Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2019) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 13^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 E-book: https://www.vlebooks.com/Vleweb/Product/Index/1993343?page=0 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 26/09/2024 18:28

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2023-24

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% in project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g., http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; and plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

There will be an introduction session of the course on 6th October 2023.

Module Time: 3 full days (9.00am – 5.00pm) on 4^th, 6^th, and 8^th December 2023.
Reserve 4^th – 11^th December 2023 for TPE25 ONLY.
Reserve 9^th and 10^th December 2023 for conducting part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment on 11^th December 2023.
It is necessary for you to have a Window-based or MacOS laptop for Excel modelling. There is a possibility that students use computers in the computer lab. If you do not have a laptop, be prepared to stay in Cambridge for a few more days after 11^th December 2023 so that you can conduct Excel modelling in relation to your course assessment in the CJBS Computer Lab – subject to the availability of the lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

de Neufville, R. and Scholtes, S. (2011), Ch 2: "Recognition of Uncertainty".
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’.

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files Anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2024. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

Anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2024.

Marks will be available in three-four weeks after the submission date.

Booklists

Please refer to the Booklist for Part IIB Courses for references to this module, this can be found on the associated Moodle course.

Module Webpage

To be advised: https://www.vle.cam.ac.uk

TPE25 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book: https://ebookcentral.proquest.com/lib/CAM/detail.action?pq-origsite=prim... Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2019) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 13^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 E-book: https://www.vlebooks.com/Vleweb/Product/Index/1993343?page=0 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 14/08/2023 11:37

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2022-23

Module Leader

Prof. H Jiang

Lecturer

Prof. H Jiang

Lab Leader

Prof. H Jiang

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% in project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g., http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; and plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

Module Time: 3 full days (9.00am – 5.00pm) on 5^th, 7^th, and ^9th December 2022.
Reserve 5^th – 12^th December 2022 for TPE25 ONLY.
Reserve 10^th and 11^th December 2022 for conducting part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment on 12^th December 2022.
There is a possibility that this course will be delivered online depending on when the Covid19 social distancing rules will be removed.
It is necessary for you to have a Window-based laptop for Excel modelling although it is possible that a Mac-based laptop can be used for Excel modelling. If this course is delivered in classroom and Cambridge, then there is a possibility that students use computers in the computer lab. In the latter, if you do not have a laptop, be prepared to stay in Cambridge for a few more days after 12^th December 2022 so that you can conduct Excel modelling in relation to your course assessment in the CJBS Computer Lab – subject to availability of the lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

de Neufville, R. and Scholtes, S. (2011), Ch 2: "Recognition of Uncertainty".
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’.

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files Anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2023. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

Anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2023.

Marks will be available in three-four weeks after the submission date.

Booklists

Please refer to the Booklist for Part IIB Courses for references to this module, this can be found on the associated Moodle course.

Module Webpage

To be advised: https://www.vle.cam.ac.uk

TPE25 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book: https://ebookcentral.proquest.com/lib/CAM/detail.action?pq-origsite=prim... Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2019) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 13^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 E-book: https://www.vlebooks.com/Vleweb/Product/Index/1993343?page=0 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 18/06/2022 11:24

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2020-21

Module Leader

Dr H Jiang

Lecturer

Dr H Jiang

Lab Leader

Dr H Jiang

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% in project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g. http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

Module Time: 3 full days (9.00am – 5.00pm) on 7^th, 9^th, and 11^th December 2020.
Reserve 7^th – 14^th December 2020 for TPE25 ONLY.
Reserve 12^th and 13^th December 2020 for conducting part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment from 13:30 until 15:30 on 14^th December 2020.
There is a possibility that this course will be delivered online depending on when the Covid19 social distancing rules will be removed.
It is necessary for you to have a Window-based laptop for Excel modelling although it is possible that a Mac-based laptop can be used for Excel modelling. If this course is delivered in classroom and Cambridge, then there is a possibility that students use computers in the computer lab. In the latter, if you do not have a laptop, be prepared to stay in Cambridge for a few more days after 16^th December 2020 so that you can conduct Excel modelling in relation to your course assessment in the CJBS Computer Lab – subject to availability of the lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

de Neufville, R. and Scholtes, S. (2011), Ch 2: "Recognition of Uncertainty".
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’.

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files Anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2021. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

Anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2021.

Marks will be available in three-four weeks after the submission date.

Booklists

Please refer to the Booklist for Part IIB Courses for references to this module, this can be found on the associated Moodle course.

Module Webpage

To be advised: https://www.vle.cam.ac.uk

TPE25 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book: https://ebookcentral.proquest.com/lib/CAM/detail.action?pq-origsite=prim... Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2019) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 13^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 E-book: https://www.vlebooks.com/Vleweb/Product/Index/1993343?page=0 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 12/09/2020 13:14

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2019-20

Module Leader

Dr H Jiang

Lecturer

Dr H Jiang

Lab Leader

Dr H Jiang

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% ind project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g. http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

Module Time: 3 full days (9.00am – 5.00pm) on 9th, 11th, and 13th December 2019.
Reserve 9th – 16th December 2019 for TPE25 only.
Reserve 14th - 15th December 2019 for conducting part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment at 9am-11am on 16^th December 2019.
It is useful for you to have a Window-based laptop for Excel modelling. If you do not have a laptop, be prepared to stay in Cambridge for a few more days after 16^th December 2019 so that you can conduct Excel modelling in the CJBS Computer Lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

Savage (2003), Ch. 2: ‘The building blocks of uncertainty: random variables’, Ch. 3: ‘The buildings of uncertainty: functions of random variables’.
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2019. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2019.

Marks will be available in three-four weeks after the submission date.

Booklists

Please see the Booklist for Group I Courses for references for this module.

Module Webpage

To be advised: https://www.vle.cam.ac.uk/course/view.php?id=83341

TPE6 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book via Dawsonera (Click on ‘institutional login’) Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2011) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 10^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 05/06/2019 10:45

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2018-19

Module Leader

Dr H Jiang

Lecturer

Dr H Jiang

Lab Leader

Dr H Jiang

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% ind project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g. http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

Module Time: 3 full days (9.00am – 5.00pm) on 3^rd, 5^th, and 7^th December 2018.
Reserve 3^rd – 10^th December 2018 for TPE25 only.
Reserve 8^th and 10^th December 2018 for conducting part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment at 9am-11am on 10^th December 2018.
It is useful for you to have a Window-based laptop for Excel modelling. If you do not have a laptop, be prepared to stay in Cambridge for a few more days after 10^th December 2018 so that you can conduct Excel modelling in the CJBS Computer Lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

Savage (2003), Ch. 2: ‘The building blocks of uncertainty: random variables’, Ch. 3: ‘The buildings of uncertainty: functions of random variables’.
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2019. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2019.

Marks will be available in three-four weeks after the submission date.

Booklists

Please see the Booklist for Group I Courses for references for this module.

Module Webpage

To be advised: https://www.vle.cam.ac.uk/course/view.php?id=83341

TPE6 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book via Dawsonera (Click on ‘institutional login’) Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2011) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 10^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 31/05/2018 19:32

Engineering Tripos Part IIB, 4I1: Strategic Valuation, 2017-18

Module Leader

Dr H Jiang

Lecturer

Dr H Jiang

Lab Leader

Dr H Jiang

Timing and Structure

Christmas vacation - dates below; Assessment: Coursework 100% ind project combining spreadsheet modelling, written analysis and a management-style report - details TBA. You may conduct some Excel modelling with fellow students. Michaelmas/Lent Term break.

Prerequisites

All participants are expected to be familiar with probability and statistics at the level of a final year high school or introductory undergraduate course. See the prerequisites document on the course website for details. Participants are also expected to be familiar with basic Excel spreadsheet modelling (see e.g. http://best-excel-tutorial.com/54-basics for a tutorial). The basic Excel functions and tasks that you must know how to use competently are: MAX, AVERAGE, COUNT, IF, SUMPRODUCT; mathematical formulas based on relative and absolute references; creating simple tables; plotting pie, bar, column and line charts.

Aims

The aims of the course are to:

See below.

Objectives

As specific objectives, by the end of the course students should be able to:

See below.

Content

Module Time: 3 full days (9.00am – 5.00pm) on 4^th, 6^th, and 8^th December 2017.
Reserve 4^th – 11^th December 2017 for TPE25 only.
Reserve 9^th and 10^th December 2017 for conducting part I of the course assessment.
Reserve a compulsory Q&A session for the course assessment at 9am-11am on 11^th December 2017.
It is useful for you to have a Window-based laptop for Excel modelling. If you do not have a laptop, be prepared to stay in Cambridge for a few more days after 11^th December 2017 so that you can conduct Excel modelling in the CJBS Computer Lab.
The level of mathematical theory may be below the expectation of some CUED students.

This module introduces students to two essential and complementary ways of dealing with future uncertainties. On one hand, we have diversification, the notion that you should "not put all your eggs in one basket", is both intuitive and ubiquitous in modern management. This exemplifies passive risk management. On the other, we have the real options paradigm. This emphasises that future value depends both on unfolding uncertainties, which you cannot control, and the flexibility of your future responses. By investing in research and development projects, for example, companies buy the option to launch a product, which they may or may not exercise, depending on the level of success of the R and D effort and on market conditions at the time of launch. However, flexibility also costs money: R and D expenditure, for example in the biotech industry, can be huge. So how much flexibility shall we build into the system? This is the realm of project design for active risk management. System designers and project managers need tools that help them decide if added flexibility is worth the money. This course provides the students with a mindset and a suite of tools to tackle such problems.

The emphasis is on management and design of technological projects. Examples and case studies will illustrate how theory can be adapted to actual conditions.

Please note that the number of places available to Part IIB Engineers is limited. Students who have not taken 3E3 will be given priority. A ballot will be held if the module looks likely to be oversubscribed. The ballot will take place on the first day of lectures, after which the Teaching Office will be in touch with any unsuccessful applicants to ask them to select another module.

Day 1: Foundations

Course aims and objectives
Review of traditional project valuation
System value is a shape, not a number
Monte Carlo Simulation
(Valuing flexibility)

Preparatory reading:

Savage (2003), Ch. 2: ‘The building blocks of uncertainty: random variables’, Ch. 3: ‘The buildings of uncertainty: functions of random variables’.
If you have not seen Net Present Value (NPV) or Discounted Cash Flows before, read Brealey and Meyers, Ch. 2: ‘Present values’

Day 2: Portfolio Thinking

Diversification
Hedging
Trading off risk against return

Preparatory reading:

www.moneychimp.com/articles/risk/riskintro.htm, first five sections (short!) from ‘MPT Introduction’ to ‘Build a Portfolio’.
Optionally, Brealey and Meyers, Ch. 9: ‘Risk’ [For 8^th edition, use Ch. 8]

Day 3: Real Options Analysis

Flexibility: Intuition behind real options
Lattice valuations

Preparatory reading:

Brealey and Meyers, Ch. 10: ‘Project Analysis’, Ch. 20: ‘Understanding Options’ [For the 9^th edition, use Ch. 11, Ch. 21]
de Neufville and Scholtes (2011), Ch. I: ‘High Level Overview’ (pp. 1-39)

Further notes

Required software

The basic modelling tool will be Microsoft Excel. Essential add-ins include Analysis ToolPak and Solver, both of which come with Excel but may require the Excel installation disks, and @Risk, which will be distributed to you.

Coursework

Coursework	Format	Due date & marks
100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%). Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations. Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.	Individually Assessed Answer Sheet, Presentation Document and Excel Files anonymously marked	The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2018. Marks will be available in three-four weeks after the submission date.

Format

Due date

& marks

100% individual project combining spreadsheet modelling, written analysis and a management-style report. The coursework consists of two parts: Task I (65%-70%) and Task II (30%-35%).

Task I contains a number of subtasks, in which students are asked to conduct intensive Excel modelling, to answer questions, to provide analysis, and to give intuitive business interpretations.

Task II is a short presentation and is assessed by a set of criteria: intuition (business implication), prioritising information (structure), clarity and use of visual aids such as charts and graphs, and language.

Individually Assessed

Answer Sheet, Presentation Document and Excel Files

anonymously marked

The coursework will be carried out during Michaelmas/Lent term break and will be submitted right before the beginning of the Lent term in January 2018.

Marks will be available in three-four weeks after the submission date.

Booklists

Please see the Booklist for Group I Courses for references for this module.

Module Webpage

To be advised: https://www.vle.cam.ac.uk/course/view.php?id=83341

TPE6 Strategic Valuation

Reference Books

The following are available in multiple copies in the Judge Business School Information Centre:

de Neufville, R. and Scholtes, S. (2011)	Flexibility in Engineering Design. Cambridge, MA: MIT Press	E-book via Dawsonera (Click on ‘institutional login’) Printed book at: TA174.D46 2011
Brealey, R. A, Myers, S. C. and Allen, F. (2011) or Brealey, R. A, Myers, S. C. and Allen, F. (2008)	Principles of Corporate Finance. 10^th ed. Boston, Mass.: Irwin McGraw Hill 9^th ed. N.B. For Brealey and Myers, any edition from 6^th ed. onwards is fine.	Printed books at: HG4026.B73 P7 2011 HG4026.B73 P7 2008
Savage, S. L. (2003)	Decision Making with Insight. Belmont, CA: Brooks/Cole	Printed book at: HF5548.4.S38 2003
Luenberger, D. G. (1998)	Investment Science. Oxford: Oxford University Press	Printed book at: HG4515.2.L83

Examination Guidelines

Please refer to Form & conduct of the examinations.

UK-SPEC

This syllabus contributes to the following areas of the UK-SPEC standard:

Toggle display of UK-SPEC areas.

GT1

Develop transferable skills that will be of value in a wide range of situations. These are exemplified by the Qualifications and Curriculum Authority Higher Level Key Skills and include problem solving, communication, and working with others, as well as the effective use of general IT facilities and information retrieval skills. They also include planning self-learning and improving performance, as the foundation for lifelong learning/CPD.

IA1

Apply appropriate quantitative science and engineering tools to the analysis of problems.

IA2

Demonstrate creative and innovative ability in the synthesis of solutions and in formulating designs.

KU1

Demonstrate knowledge and understanding of essential facts, concepts, theories and principles of their engineering discipline, and its underpinning science and mathematics.

KU2

Have an appreciation of the wider multidisciplinary engineering context and its underlying principles.

S1

The ability to make general evaluations of commercial risks through some understanding of the basis of such risks.

S2

Extensive knowledge and understanding of management and business practices, and their limitations, and how these may be applied appropriately to strategic and tactical issues.

E1

Ability to use fundamental knowledge to investigate new and emerging technologies.

E3

Ability to apply mathematical and computer based models for solving problems in engineering, and the ability to assess the limitations of particular cases.

P3

Understanding of contexts in which engineering knowledge can be applied (e.g. operations and management, technology, development, etc).

P8

Ability to apply engineering techniques taking account of a range of commercial and industrial constraints.

US1

A comprehensive understanding of the scientific principles of own specialisation and related disciplines.

US3

An understanding of concepts from a range of areas including some outside engineering, and the ability to apply them effectively in engineering projects.

Last modified: 12/09/2017 16:31

James Dyson Award

Design something that solves a problem - and win up to £30,000. Full details can be found at: https://jamesdysonaward.org/en-GB/the-brief/

Last updated on 08/12/2017 12:39

Engineering Tripos Part IIB, 4M19: Advanced Building Physics, 2025-26

Module Leader

Prof G Hunt

Lecturers

Prof Gary Hunt, Prof R Choudhary, Prof S Fitzgerald

Timing and Structure

16 lectures (including integrated examples classes) + coursework; Assessment: 100% coursework

Aims

The aims of the course are to:

To develop a deep understanding of principles of building physics at the system level to guide the design of zero-carbon buildings
To understand methods and tools used for quantifying energy efficiency of buildings
To understand the design of heating, cooling, and ventilation in buildings

Objectives

As specific objectives, by the end of the course students should be able to:

evaluate alternative energy systems and buildings technologies against energy consumption for a given context.
design and evaluate energy efficiency of buildings
understand the factors that influence and control the movement of air and heat in naturally ventilated buildings.

Content

Designing sustainable buildings requires making choices among various building materials and components, and more efficient use of energy and natural resources. In order to do so, the building structure, the building fabric and the building services must be understood both in individual detail and as interacting systems. For example, the need for energy must be analysed in conjunction with energy production for heating and cooling, distribution, thermal storage and the end-use in buildings. The module first introduces students to energy-efficient building systems and other advanced building physics topics. It subsequently describes energy modelling techniques for analysing buildings as a system of interacting components and processes leading to low-energy buildings that satisfy occupant comfort systems and technologies. The module aims to develop a deep understanding of how fundamental principles of building physics are integrated at the system level to guide the design of zero-carbon built environments.

Energy Efficient Building Systems (2 hours, Fitzgerald)

Building physics in the context of climate change
Integrated design of heating, cooling, and ventilation systems

Ventilation: creating air movements for the supply of fresh air and removal of stale air (10 hours, Hunt)

Natural ventilation of modern buildings
Displacement ventilation & thermally stratified flows
Mixing ventilation
Airflow through vents
Transient flows through rooms & night purging
Steady flows through rooms & heat source modelling
Sizing ventilation openings
Low-energy design

Building Performance Modelling (4 hours, Choudhary)

Introduction to data-driven performance assessment
Integrated design of heating, cooling, and ventilation systems

Further notes

Examples papers

Coursework

Assignment 1: natural ventilation strategy of a classroom. (15%)

Assignment 2: consists of using sensors to monitor a space in the department and analyse its performance. (15%)

Assignment 3: drawing directly from the ventilation lectures, consists of an in-class exercise to map out (qualitatively and quantitatively) the preliminary design of a low-energy, naturally ventilated building. (70%)

Booklists

Please refer to the Booklist for Part IIB Courses for references to this module, this can be found on the associated Moodle course.

Examination Guidelines

Please refer to Form & conduct of the examinations.

Last modified: 09/10/2025 16:05

Engineering Tripos Part IIB, 4M19: Advanced Building Physics, 2024-25

Module Leader

Prof G Hunt

Lecturers

Prof Gary Hunt, Prof S Fitzgerald

Timing and Structure

16 lectures (including integrated examples classes) + coursework; Assessment: 100% coursework

Prerequisites

3D8

Aims

The aims of the course are to:

To develop a deep understanding of principles of building physics at the system level to guide the design of zero-carbon buildings
To understand methods and tools used for quantifying energy efficiency of buildings
To understand the design of heating, cooling, and ventilation in buildings

Objectives

As specific objectives, by the end of the course students should be able to:

evaluate alternative energy systems and buildings technologies against energy consumption for a given context.
design and evaluate energy efficiency of buildings
understand the factors that influence and control the movement of air and heat in naturally ventilated buildings.

Content

Designing sustainable buildings requires making choices among various building materials and components, and more efficient use of energy and natural resources. In order to do so, the building structure, the building fabric and the building services must be understood both in individual detail and as interacting systems. For example, the need for energy must be analysed in conjunction with energy production for heating and cooling, distribution, thermal storage and the end-use in buildings. The module first introduces students to energy-efficient building systems and other advanced building physics topics. It subsequently describes energy modelling techniques for analysing buildings as a system of interacting components and processes leading to low-energy buildings that satisfy occupant comfort systems and technologies. The module aims to develop a deep understanding of how fundamental principles of building physics are integrated at the system level to guide the design of zero-carbon built environments.

Energy Efficient Building Systems (4 hours, Fitzgerald)

Building physics in the context of climate change
Integrated design of heating, cooling, and ventilation systems

Ventilation: creating air movements for the supply of fresh air and removal of stale air (12 hours, Hunt)

Natural ventilation of modern buildings
Displacement ventilation & thermally stratified flows
Mixing ventilation
Airflow through vents
Transient flows through rooms & night purging
Steady flows through rooms & heat source modelling
Sizing ventilation openings
Low-energy design

Further notes

Examples papers

Coursework

1. Assignment 1, drawing directly from the ventilation lectures, consists of an in-class exercise to map out (qualitatively and quantitatively) the preliminary design of a low-energy, naturally ventilated building. (85%)

2. Assignment 2: natural ventilation strategy of a classroom. (15%)

Booklists

Please refer to the Booklist for Part IIB Courses for references to this module, this can be found on the associated Moodle course.

Examination Guidelines

Please refer to Form & conduct of the examinations.

Last modified: 10/10/2024 20:04

Search form

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Lecturer

Lab Leader

Timing and Structure

Prerequisites

Aims

Objectives

Content

Day 1: Foundations

Day 2: Portfolio Thinking

Day 3: Real Options Analysis

Further notes

Coursework

Booklists

Examination Guidelines

UK-SPEC

GT1

IA1

IA2

KU1

KU2

S1

S2

E1

E3

P3

P8

US1

US3

Module Leader

Lecturer

Lab Leader

Timing and Structure

Prerequisites

Aims

Objectives

Content

Day 1: Foundations

Day 2: Portfolio Thinking

Day 3: Real Options Analysis

Further notes

Coursework

Booklists

Examination Guidelines

UK-SPEC

GT1

IA1

IA2

KU1

KU2

S1

S2

E1

E3

P3

P8

US1

US3

Module Leader

Lecturer

Lab Leader

Timing and Structure

Prerequisites

Aims

Objectives

Content

Day 1: Foundations

Day 2: Portfolio Thinking

Day 3: Real Options Analysis

Further notes

Coursework

Booklists

Examination Guidelines

UK-SPEC

GT1

IA1

IA2

KU1

KU2