Costs and decision making

Abstract

The preceding symposium papers have indicated the saleable developments on offer in the constituent parts of the civil transport system and their collective impact in aircraft project terms is covered in the paper by Brown and Lawson.As the aircraft industry matures performance gains come less readily and costs have become a much greater determinant of progress. This paper therefore considers some of the fundamentals of cost reduction. This topic cannot be considered in isolation; cost reductions must be balanced against product effectiveness and there are major interactions between possible cost levels and sales volume. Thus, it is necessary to treat the subject in the broader framework of commercial viability. This paper attempts this task. It starts with the more direct cost questions, considers market interaction factors and concludes on a positive note by a critical review of the investment decisions needed, many of which are urgent and of critical importance to the future of the industry.