CASE22
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CASE 22
Student Version
8/13/13
NORTHWEST SUBURBAN HEALTH SYSTEM
Make or Buy Analysis
This case examines three alternatives for handling the printing needs within a large health
system. The case emphasizes cash flow analysis and cost of capital considerations for both
not-for-profit and for-profit subsidiaries.
The model calculates NPV, IRR, and MIRR on the basis of input data for three different
printing alternatives. Note that the model extends out to Column H.
The model consists of a complete base case analysis—no changes need to be made
to the existing MODEL-GENERATED DATA section. However, all values in the student
version INPUT DATA section have been replaced with zeros. Thus, students must determine
When this is done, any error cells will be corrected and the base case solution will appear.
Note that the model does not contain any risk analyses, so students will have to create
(charts) as needed to present their results.
Finally, note that the some of the inputs regarding the new (incremental) values associated
with expanding the printshop are somewhat difficult to identify, so students using the student
version of this model need to be careful when choosing these values.