CARISMA: Aircraft Cabin and Cabin Systems Refurbishing, Optimization of Technical Processes – planning of a business case for a completion center

Abstract

This Technical Note investigates the business case "completion center" from a financial point of view. First, a theoretical background is presented, regarding how to estimate chances and risks of a business plan, how to schedule cash flow or how to estimate capital investments. Second, an EXCEL based tool is created, which is foreseen as a management tool for evaluating strategic scenarios towards the vision "completion center". The tool evaluates three types of projects – small, medium, complex – over a period of five years, from 2011 to 2015. Input data for conducting this evaluation are parameters describing the project, on the one hand, such as project type, project duration, personnel required, training intensity, etc. and parameters describing the background of the project, on the other hand, such as monthly costs for staff, costs required for sales or miscellaneous costs, amount of external personnel or experts, etc. Each project evaluation delivers the cash flow, the profit and the profit-turnover ratio. A summary of output data presents the cumulative cash flow, total costs, personnel required, gain after 5 years, minimum investment and Return on Investment for the whole defined scenario. Changes applied to input data reflect automatically on the calculations. An initial Project Zero covers the initial expenses required to set up the completion center to the capability of starting independent projects. With the default input three scenarios are evaluated: 1.) small investments, small number of projects; 2.) medium investments, small number of projects; 3.) large investment, large number of projects. The results show that an initial solid investment delivers higher profits, while starting with small projects one after the other provides more safety but also less gain. However these results may not be accurate enough due to the lack of precision in estimating the project values. Engineering experience is required to create feasible scenarios.