This chapter begins with a narrative discussion on the issues surrounding flexibility. It then provides a set of numerical examples showing haw conventional net present value analysis would be modified by using the theory of option value to formally represent the opportunity cost of waiting to invest, that was patterned after examples from previous research. The chapter describes how, in a dynamic economy the demands on a transport network will never be entirely known in advance. Breakthroughs in production, supply chain, and distribution and the innovation of new products and services will invariably bring demands on a transportation facility or system that its designers did not expect. The capacity of transportation system to respond to such demands is a product of its flexibility.
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