Identifying Alternative Value Chain Configuration Options

4 Identifying Alternative Value Chain Configuration Options 

Optimization models are capable of evaluating all possible plant-site combinations simultaneously. However, this approach would considerably increase the data preparation efforts required since for each plant-site combination both investment and operating expenditures would have to be estimated. Additionally, calculation times increase significantly with the number of alternative investment opportunities. 

Whenever possible, the results of the qualitative ranking of the current site portfolio (cf. Chap. 4) were used to identify existing sites located in or close to the countries favored by management to generate investment alternatives that are in line with the overall site strategy. 

Changes in the competitive landscape might require the analysis of alternative value chain configurations. An initial understanding of viable configuration alternatives can often be gathered by analyzing the production networks of competitors. However, to truly understand the options theoretically available and the ones that could actually be implemented in practice two core analyses were found to be helpful. 

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