Data-Driven Decision Making: Financial and Risk Analysis on Equipment Procurement at PT ABC Using Predictive Data Estimation, NPV Analysis, Owner Estimate, and Monte Carlo Simulation
Journal Title: International Journal of Current Science Research and Review - Year 2023, Vol 6, Issue 12
Abstract
This research delves into strategic financial management solutions for PT ABC during the COVID-19 pandemic, concentrating on the procurement of vital airport equipment. It examines the feasibility of securing essential equipment such as ARFF vehicles, X-ray machines, ambulances, and narcotics & explosive detectors amidst financial challenges. Utilizing financial models like predictive data estimation, Net Present Value (NPV) analysis, owner estimates, and Monte Carlo simulations, the study evaluates risk probabilities and distributions linked to different procurement strategies. The research underscores the pandemic’s profound impact on the global aviation sector, notably the steep decline in passenger traffic and resulting financial strains on PT ABC. Facing stringent regulatory obligations and the urgent need for equipment upgrade, the study investigates cost-effective procurement avenues, weighing the benefits of leasing against purchasing, given the company’s constrained cash flow. The study navigates through the challenges of limited RFI data and internal corporate regulations that restrict leasing durations. It provides a detailed financial analysis to pinpoint the most economical vendors and procurement approaches, leveraging owner estimates as a negotiation tool. Risk evaluation is conducted via Monte Carlo simulation, offering insights into the likelihood and impact of procurement-related risks. Concluding, the research finds that PT ABC can best manage its procurement needs by opting for leasing over buying. This approach aligns with the company’s financial strategy amidst the crisis, allowing for the acquisition of necessary equipment within financial limits. The study identifies Vendor A for ARFF vehicles, Vendor D for X-ray machines, Vendor E for ambulances, and Vendor G for narcotics & explosive detectors as the most cost-effective choices. Leasing, particularly on a 3-year term, emerges as the most viable financial option, in compliance with PT ABC’s internal regulations and operational requirements. Utilizing owner estimates for negotiations ensures more cost-effective procurement. The Monte Carlo simulation proves invaluable in evaluating procurement risks, indicating a higher risk associated with buying than leasing. This research aids PT ABC in strategic decision-making for equipment procurement, offering lessons for the broader aviation sector navigating post-pandemic recovery.
Authors and Affiliations
Ahmad Rizki Firdaus, Erman Sumirat, Dzikri Firmansyah Hakam,
Keywords
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- EP ID EP725712
- DOI 10.47191/ijcsrr/V6-i12-98
- Views 55
- Downloads 0
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