The Application Of Real Option In Strategic Investment Decision Of Multinational Manufacturing Enterprises

In the background of economic globalization, global production and operation is regarded as an important way for multinational manufacturing enterprises to achieve global development strategies and increase competition. The global adjustment of production and operation is handled tactfully to achieve allocation and integration of international resources and the optimal global investment strategies. Practices prove that multinational manufacturing enterprises' global strategic investment activities not only can help maintain their sustainable competitive advantages to make enterprises' sustainable development come true, but also play decisive roles in enhancing national economic capacity for sustainable development and boosting up national economic strength, and so on.First this paper analyzes the characteristics of multinational manufacturing enterprises'strategic investment decision-making and summarizes the types of multinational operation models and factors that have influences on the choices of models using relative research results internal and international for reference. Then this paper compares and analyzes the traditional investment decision-making methods,binomial model and Monte Carlo simulation method.Traditional decision-making methods can not suit the global strategic investment with high risks and high returns because of not reasonably measuring the value of uncertainty. Binomial model and Monte Carlo simulation method can resolve measuring the value of uncertainty effectively, but they concern about the real option characteristics of subject investigated own, consider model applications from export perspective, and neglect import aspects.In the end, according to the shortages and limitations of binomial model and Monte Carlo simulation method, this paper structures binomial model based on cost matrix for only one variable and Monte Carlo simulation method for variables based on dynamic programming with the variables assumption loosed from independent random variables to correlated random variables, make quantitative analysis about the effect of flexibility to switch between global...