Scenario planning for public transport enterprise based on the real option method

Appropriateness of demand forecast is sometimes argued for loss-making public transport enterprises. They should also pay more attention to the change of their conditions as the risk and prepare for various alternative scenarios of conditional change and decision shift in future. The notion of real option, deriving the rational alternative with evaluation of expected gains at possible scenarios, may be available for decision making for public transport enterprise. This study attempts verifying the application for public transport enterprise of which may change intensively, depending upon the connecting transport network and the commuters' population, illustrated by an example, with considering several impediments for its application.