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Abstract

Crossair, a Swiss regional airline, has to decide on how to obtain a critical new technology, GPS. It can develop the technology in house (with supplier) or source it from the open market in the year 2000. A discounted cash flow (DCF) analysis shows only a marginal benefit from developing the technology in house, which does not justify the management attention. Does DCF analysis fully capture the project's attractiveness?
Location:
Switzerland
Industry:
Airline
Size:
CHF738 million in revenues 1996
Other setting(s):
1997-1998
Teaching note
-
Reference no. 698-030-8
Subject category: Production and Operations Management
Authors: Christoph Loch (INSEAD)
Published by: INSEAD
Originally published in: 1998
Version: May 1998
Length: 19 pages
Data source: Field research
View full details

About

Abstract

Crossair, a Swiss regional airline, has to decide on how to obtain a critical new technology, GPS. It can develop the technology in house (with supplier) or source it from the open market in the year 2000. A discounted cash flow (DCF) analysis shows only a marginal benefit from developing the technology in house, which does not justify the management attention. Does DCF analysis fully capture the project's attractiveness?

Settings

Location:
Switzerland
Industry:
Airline
Size:
CHF738 million in revenues 1996
Other setting(s):
1997-1998

Related

Teaching note
-
Reference no. 698-030-8
Subject category: Production and Operations Management
Authors: Christoph Loch (INSEAD)
Published by: INSEAD
Originally published in: 1998
Version: May 1998
Length: 19 pages
Data source: Field research
View full details