Kansai International Airport

662 words | 3 page(s)

Kansai international airport is located in the middle of Osaka bay, an artificial island. This airport serves as an international center for the Nippon cargo airlines, Japan Airlines and the Nippon Airways. Further, the airport serves as an attraction centre, and it has been identified as the original international low-cost carrier in Japan. The airport was established in 1994 with the aim of reducing on the level of overcrowding that took place at the Osaka International Airport, located near Osaka town. Currently, the airport serves only the domestic flights.

Motivation:
For a financial manager or shareholder, there is always need for one determining a project that is worthwhile and may be of high priority to the company. Furthermore, establishing the best alternative project that is economically feasible amongst some different projects is a key issue in the process of project evaluation. Despite, the fact that in engineering economics, the standard techniques can be employed in determining the costs and benefits of a project, it is difficult to assess the benefits and costs of large-scale projects such as the airline industries. Besides, the conversion of the costs related to the airline industry into monetary terms is difficult, and there is limited information concerning the complexities that involved in the costs and the benefits of various projects. Thus, in this paper, a discussion is made on the project evaluation using a case of the Kansai international airport.

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Methodology:
Objective 1:
To be able to establish the background information of the project, the group will use a qualitative approach in the collection of data relating to the case study. These will involve the use of secondary source on data collecting involving project evaluation in the transport industry.

Objective 2:
To be able to determine the costs and the benefits that relate to the project under study, there will be a need for collection of data on various aspects of costs and benefits related to Kansai international airport. This will be obtained from the financial statements of the company. Data collected will involve the estimated cost of acquisition of various inputs, maintenance and operation costs, estimated life of various machines, estimations of the operating IRR over the planned horizon in the form of an estimate of MARR. Finally, there will be a collection of data on the estimated of income per year and the salvage value of the project.

Objective 3:
For purposes of establishing the third objective, the study will use secondary sources such as newspaper articles, websites that have information on the current projects, books, thesis, and engineering journals.

Objective 4:
Decisions made regarding the design and implementation of the project will be made through the adoption of quantitative methods. This will involve the use ofnumerical figures and textual forms in the description of the decisions that are made by the stakeholders regarding the project under evaluation.

Objective 5:
The presentation of the status and the results of the project at the time of completion will be done by use of tables and graphs. This will be done after the data obtained being converted into textual and numerical forms.

Objective 6:
The discussion and criticism of the project will be done by use of a mixed approach. This will involve evaluating the decisions made in the results against data in the secondary sources concerning the project or the project evaluation process.

Expectations:
Engineering economy is a key issue in the process of project evaluation as it provides a background upon which other factors are considered as either social or environmental. If organizations and government of Japan will consider the role played by engineering economy and appreciate it through the adoption of the credited Engineering economists in the commencement of projects, there will be saving of lots of money. Project evaluation is of great importance as it enables a company to determine the type of technology that requires being adopted in a particular industry. Furthermore, it helps to determine the maintenance cost of a project, economies of airline transport to rail transport.

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