TY - GEN
T1 - Method to evaluate the profitability and risk structure of projects in the automotive industry
AU - Bredow, M. V.
AU - Reinhart, G.
PY - 2009
Y1 - 2009
N2 - As automotive companies are concentrating on their core competencies, the number and importance of buyer-supplier-relationships is growing. Furthermore, projects in the automotive industry are characterized by runtimes up to ten or more years and the environment can be described as turbulent. Therefore, decisions of companies are subject to a decreasing predictability of future cost and risk factors concerning not only their own value creation, but also the collaboration with suppliers and buyers. Hence, today's evaluation of profitability by calculating one deterministic Net Present Value (NPV) for a single project is not sufficient. The paper describes a method, which allows the evaluation of projects profitability under detailed consideration of occurring costs and risks in the company-wide value creation process over the project runtime.
AB - As automotive companies are concentrating on their core competencies, the number and importance of buyer-supplier-relationships is growing. Furthermore, projects in the automotive industry are characterized by runtimes up to ten or more years and the environment can be described as turbulent. Therefore, decisions of companies are subject to a decreasing predictability of future cost and risk factors concerning not only their own value creation, but also the collaboration with suppliers and buyers. Hence, today's evaluation of profitability by calculating one deterministic Net Present Value (NPV) for a single project is not sufficient. The paper describes a method, which allows the evaluation of projects profitability under detailed consideration of occurring costs and risks in the company-wide value creation process over the project runtime.
KW - Automotive industry
KW - Cost and risk evaluation
KW - Life cycle costing
KW - Monte Carlo method
KW - Supply chain
UR - http://www.scopus.com/inward/record.url?scp=77949515946&partnerID=8YFLogxK
U2 - 10.1109/IEEM.2009.5373105
DO - 10.1109/IEEM.2009.5373105
M3 - Conference contribution
AN - SCOPUS:77949515946
SN - 9781424448708
T3 - IEEM 2009 - IEEE International Conference on Industrial Engineering and Engineering Management
SP - 1588
EP - 1592
BT - IEEM 2009 - IEEE International Conference on Industrial Engineering and Engineering Management
T2 - IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2009
Y2 - 8 December 2009 through 11 December 2009
ER -
