• Management Science and Financial Engineering
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• v.22 no.1
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• pp.13-20
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• 2016

We investigate the optimal consumption and investment problem when a working debtor has an option to file for bankruptcy. By applying the duality approach, the closed-form solutions are obtained for the case of CRRA utility function. The optimal bankruptcy time is determined by the first hitting time when the financial wealth hits the wealth threshold derived from the optimal stopping time problem. Moreover, the numerical results show that the investment increases as the wealth approaches the threshold and the value gain from the bankruptcy option is vanished as wealth increases.

• Journal of Internet Computing and Services
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• v.15 no.3
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• pp.91-100
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• 2014

While IT security investment of organizations has been increased, the amount of the monetary loss of organizations caused by IT security breaches did not decrease as much as their expectation. Also, from surveys, it was discovered that the poor usage of their security budget thwarted the improvement of the organization's security level. In this paper, to resolve the poor usage of security budget of organizations, we propose a comprehensive economic model for determining the optimal amount of investment in security solutions, including the proactive security solutions(PSSs) and the reactive security solutions(RSSs). Using the proposed analytical model under different parameters of security solutions, we show the optimal condition to maximize the expected net benefits from IT security investment of organizations. Also, we verify the common belief that the optimal level of investment in security solutions is an increasing function of vulnerability. Through simulations, we find the optimal level of IT security investment, given parameters of different characteristics of security solutions.

• Journal of the Chungcheong Mathematical Society
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• v.31 no.1
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• pp.65-73
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• 2018

We investigate the optimal consumption and investment problem of working agent who faces tax system on consumption, labor income, savings and investment. By applying martingale method, we obtain the closed-form solutions so it is possible to verify the effect of tax system analytically.

• The Transactions of the Korean Institute of Electrical Engineers
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• v.38 no.8
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• pp.585-592
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• 1989

This paper presents an efficient algorithm for the reactive planning of transmission network under normal operating conditions. The optimal operation of a power system is a prerequisite to obtain the optimal investment planning. The operation problem is decomposed into a P-optimization module and a Q-optimization module, but both modules use the same objective function of generation cost. In the investment problem, a new variable decomposition technique is adopted which can operate the operation and the investment variables. The optimization problem is solved by using the gradient projection method (GPM).

• IE interfaces
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• v.24 no.4
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• pp.396-407
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• 2011

We develop a cash management model in which firms face randomly occurred investment projects and retrieve investments upon the maturity of these projects. Using the Markov Decision Problem approach, we examine a control policy which dynamically adjusts the cash balance under the discounted cost criterion. The existence of an optimal policy is shown under some conditions. The optimal solution procedure is developed to find the optimal points and the optimal sizes for adjusting the cash balance. In numerical experiment, we investigate important structural properties of the optimal cash management policy.

• Journal of Korean Institute of Industrial Engineers
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• v.32 no.3
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• pp.180-190
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• 2006

We evaluate the economic value and the optimal investment timing of IMT-2000 in Korea, in the perspective of a service provider who owns the business license for IMT-2000, by using the real options analysis. The result clearly shows the project value with options is positive and delaying the investment is more favorable to the provider. Binomial lattice approach, in which we try to describe American call option and sequential compound option, and sensitivity analysis present the optimal decisions according to future states and enable the management to make decision strategically and proactively.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2004.10a
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• pp.229-244
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• 2004

This study addresses the problem of flexible technology acquisition in multi-product market when demands are uncertain. We confine the concept of flexibility to the ability of manufacturing system to produce a number of different types of products, called product-mix flexibility type. And an analytical model in which economies of scope is incorporated explicitly as a feature of flexible technology is presented to find the optimal investment decision to acquire flexible technology and optimal production planning. The characteristics of optimal investment strategy related to capacity and production planning are discussed.

• Journal of Korean Institute of Industrial Engineers
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• v.31 no.2
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• pp.135-142
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• 2005

This study addresses the problem of flexible technology acquisition in a multi-product market when demands are uncertain. We confine the concept of flexibility to the ability of manufacturing system to produce a number of different types of products, called a product-mix flexibility type. And an analytical model in which the economies of scope are incorporated explicitly as a feature of flexible technology is presented to find the optimal investment decision to acquire flexible technology and optimal production planning. The characteristics of optimal investment strategy related to capacity and production planning are discussed.

• Journal of Information Technology Services
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• v.18 no.5
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• pp.155-164
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• 2019

With the emergence of new ICT technologies, information security threats are becoming more advanced, intelligent, and diverse. Even though the awareness of the importance of information security increases, the information security budget is not enough because of the lack of effectiveness measurement of the information security investment. Therefore, it is necessary to optimize the information security investment in each business environment to minimize the cost of operating the information security countermeasures and mitigate the damages occurred from the information security breaches. In this paper, using genetic algorithms we propose an investment optimization model for information security countermeasures with the limited budget. The optimal information security countermeasures were derived based on the actual information security investment status of SMEs. The optimal solution supports the decision on the appropriate investment level for each information security countermeasures.

• Journal of Technology Innovation
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• v.16 no.1
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• pp.191-213
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• 2008

This study investigates the effect of technology import and R&D investment on the value of the firm in Korea. The result shows that the technology import announcement effect of firms with a low R&D investment is higher than that of firms with a high R&D investment. The evidence suggests that technology import can substitute the existing R&D capability of the firm. In addition, the result shows that there is an optimal level of technology import and R&D investment to maximize the value of the firm. In particular, firms with a low R&D investment and a large amount of technology import experience the highest announcement effect. The study concludes that an adequate allocation of fim's capital between R&D investment and technology import is needed for firm's optimal technology strategy.