Engineering Systems Analysis for Design
MIT's ESD.71 teaches real options analysis for engineering systems design, the method of building flexibility into a project so it can adapt to new opportunities and avoid costly failures. Professor Richard de Neufville builds the course on system models, decision analysis, and financial option theory, then shows how real options in engineering differ from financial options because they depend on physical and technological constraints, not just market variables. Lectures and assignments cover valuation methods for flexibility, case studies drawn from infrastructure and technology projects, and techniques for incorporating option value into system optimization. Materials include lecture notes, assignments, and readings published through MIT OpenCourseWare, free to access with no certificate offered. The course targets students who already have grounding in decision analysis and want to apply it to large-scale engineering design problems where uncertainty and staged investment decisions matter.