Use of Sensitivity Analysis a Decision Support System in Automotive Painting Technology Investment

Background/Objective: This paper presents a study on the use of Sensitivity Analysis (SA) approach to support a decision- making in capital investment and secondary tools Value Added and Value Engineering (VA/VE) to optimize the capital investment in automotive painting technology. Methods/Analysis: First, the investment requirement in new painting technology is identified. Using the in-house company limitation and regulation, the requirement is then simplified in order to ease the further process in investment calculation. The sensitivity analysis is then being used to analyze the financial investment calculation to help the company’s top management making decision. The VA/VE then will be used to reduce further the equipment and building cost. Findings: The value engineering methodology carried out by Small Group Activities (SGA) reduced the cost while maintaining the same intended output. From the calculation result, it is found that the sensitivity analysis is effectively support and help the decision making process considerably. Applications/ Improvements: Sensitivity analysis provides several alternatives to the company to consider financial investment options.