Case Study: Modeling to Support Key Purchasing Decision
Daniel Feiman
Daniel Feiman
Client

Aircraft parts distributor

Problem

An aircraft parts distributor wanted to acquire a major asset but could not decide between two seemingly compelling alternatives. Time was short and they needed to make the RIGHT decision because of the potential long-term financial impact on the firm. The complexity of the situation was enhanced because the assets had different useful lifetimes.

Solution

I met with the stakeholders to understand what the asset was supposed to do & why they needed it. I scrutinized all information on both alternatives, built a side-by-side comparative model to calculate the value of each & the benefit of 1 over the other. This allowed us to explain why one choice was better for the firm than the other.

I also ran scenario analysis to determine the results under varying circumstances to "stress test" the initial results & developed case studies for presentation to the firm’s board of directors.

Result

In less than one week I was able to calculate & demonstrate how to obtain the better alternative, why it was superior, and ultimately saved the company $78,500 over the asset’s lifetime.