Cost modeling in the integrated supply chain strategic decision process

This thesis is based on an internship at Honeywell Aerospace's Integrated Supply Chain (ISC) Leadership division. This work focuses on the role and use of analytical cost models in the strategy development process. The scope of ISC strategic decisions encompasses Honeywell Aerospace's global footprint of external and internal suppliers, and includes insourcing, outsourcing, transition and consolidation activities. The current practice within Honeywell Aerospace is to construct a Transition, Migration, and Integration (TMI) model which calculates the net present benefit associated with a specific transition's spending and savings. This model is the primary tool for strategic plan development. This work looks at the use of the TMI model for strategic planning with the intent of addressing concerns related to the model's complexity and accuracy. This work also develops the framework for estimating a confidence range within the TMI model to provide better visibility to the potential range of financial outcome. An additional tool used in the development of the strategic plan is the Landed Cost model.