This research determines the optimal investment timing using real options valuation to support decision-making for economic sustainability assessment. This paper illustrates an option pricing model using the Black-Scholes model applied to a case project to understand the model performance. Applicability of the project to the model requires two Monte Carlo simulations to satisfy a Markov process and a Wiener process. The position of project developers is not only the seller of products, but it is also the buyer of raw materials. Real options valuation can be influenced by the volatility of cash outflow, as well as the volatility of cash inflow. This study suggests two-color rainbow options valuation to overcome this issue, which is demonstrated for a steel plant project. The asymmetric results of the case study show that cash outflow (put option) influences the value of the steel plant project more than cash inflow (call option) does of which the discussion of the results is referred to a sensitivity analysis. The real options valuation method proposed in this study contributes to the literature on applying the new model, taking into consideration that investors maximize project profitability for economic sustainable development.

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Recently, global market competition of iron and steel products is ever increasing due to over-supply from increased number of industries in rapidly growing countries, such as China, Brazil, and Indonesia. To occupy the big market, major industries are trying to develop high quality, high performance steel products via developing a new iron and steel making process. In other words, development of a new and innovative steel plant is a key to cope with the tough situation. Design and development for the life cycle of iron and steel making plant is very much complex and multi-disciplinary. In this paper, Plant Systems Engineering (PSE), a tailored SE process for industrial plant based on ISO/IEC 15288 is used for the design of Continuous Casting Process (CCP) Plant system. The CCP is a crucial process in steel making plant, whose design technology is occupied by the advanced foreign companies. For the sake of increasing engineering capability for the design of CCP, we applied PSE Process for the renovation of the existing CCP Process. Through the study, we were convinced that the applied method can be used for other plant systems, and SE is really the way of thinking, design, and development of modern complex and multi-disciplinary systems where high risk factors are present throughout the whole life cycle.