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The Purpose of Project Economic Models

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04 April 2017

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05 April 2017

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Abstract
Models come in different forms: visual, arithmetic, mental, physical. The most common type of model is arguably the mental model, which people use to view and interpret the world. A model can be described as a representation of a problem or a situation – a simplified representation. The process of building or developing a model is called modeling. A model once developed by the modeller, can be ‘owned’ by a manager or decision maker. The ideal is to make the model an extension of the user’s ability to think about and analyse problems or situations. When used properly – taking into consideration its limitations – an economic model for a project can provide insight for decision makers, when making the crucial decision to approve a project. An economic model for a liquefied natural gas (LNG) project is shown as an example.
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Subject: Business, Economics and Management  -   Economics
Copyright: This open access article is published under a Creative Commons CC BY 4.0 license, which permit the free download, distribution, and reuse, provided that the author and preprint are cited in any reuse.
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