As the flight manager you are required to prepare an operating budget for Year 3 with the following assumptions: There is a recession on going
As the flight manager you are required to prepare an operating budget for Year 3 with the following assumptions:
- There is a recession on going with the expectation that costs must be reduced, even though the industry analysts forecast otherwise.
- The cost of fuel will increase by 5% due to OPEC.
- Crew salary and benefits will increase by 3%.
- Maintenance labor will increase by 2%.
- The goal of the Chief Financial Officer (CFO) is to keep costs consistent with year 2.
The CFO has challenged you to prepare a budget which could keep the aircraft total cost per hour consistent with year 2. You must present a budget identifying how you will accomplish this goal. Please be detailed with your assumptions and with explanations as to how you reached your goal.
There is no minimum length for this assignment but you must explain and show how you reached the values for each entry your year 3 into Tables 1 above. This assignment will be submitted via a Word document or .pdf below.
The American Pet Products Association (APPA) estimated that total U.S. Pet Industry Expenditures for 2016 would be as follows (view Table 2, 3, 4, tables are already in chronological order
Table 4 Pet Paws Actual Sales Pet Paws Estimated within the U.S. Market 2016 Sales within the in 2015 U.S. Market Food $ 18 Million $ 18.5 Million Supplies / OTC Medicine $ 7 Million $ 7 Million Veterinary Care $ 17.7 Million $ 18.1 Million Live Animal Purchases $ 2.8 Million $ 3.1 Million Pet Services: Grooming & Boarding $ 12.4 Million $ 13.1 Million Actual Sales within the Estimated 2016 Sales U.S. Market in 2015 within the U.S. Market Food $ 23.05 Billion $ 24.01 Billion Supplies / OTC Medicine $ 14.28 Billion $ 14.98 Billion Veterinary Care $ 15.42 Billion $15.92 Billion Live Animal Purchases $ 2.12 Billion $ 2.11 Billion Pet Services: Grooming & Boarding $ 5.41 Billion $ 5.73 Billion Pet Industry Market Size & Ownership Statistics e Year Billions of Dollars Year Billions of Dollars 2016 $62.75 Estimated 2006 $38.5 2015 $60.28 Actual 2005 $36.3 2014 $58.04 2004 $34.4 2013 $55.72 2003 $32.4 2012 $53.33 2002 $29.6 2011 $50.96 2001 $28.5 2010 $48.35 2000 $27.6 2009 $45.53 1999 $24.4 2008 $43.2 1998 $23.2 2007 $41.2 1997 $22.1 Table 1 CEO Personal Travel CEO Individual CFO Individual Business Travel Business Travel CEO and CFO Business Travel Together Veterinarian Emergency Travel Total Utilization Year 1 Utilization 30 (hours) 130 110 50 20 340 Year 2 Utilization 40 (hours) 160 130 90 50 470 Anticipated Year 3 Utilization (hours) Table 4 Pet Paws Actual Sales Pet Paws Estimated within the U.S. Market 2016 Sales within the in 2015 U.S. Market Food $ 18 Million $ 18.5 Million Supplies / OTC Medicine $ 7 Million $ 7 Million Veterinary Care $ 17.7 Million $ 18.1 Million Live Animal Purchases $ 2.8 Million $ 3.1 Million Pet Services: Grooming & Boarding $ 12.4 Million $ 13.1 Million Actual Sales within the Estimated 2016 Sales U.S. Market in 2015 within the U.S. Market Food $ 23.05 Billion $ 24.01 Billion Supplies / OTC Medicine $ 14.28 Billion $ 14.98 Billion Veterinary Care $ 15.42 Billion $15.92 Billion Live Animal Purchases $ 2.12 Billion $ 2.11 Billion Pet Services: Grooming & Boarding $ 5.41 Billion $ 5.73 Billion Pet Industry Market Size & Ownership Statistics e Year Billions of Dollars Year Billions of Dollars 2016 $62.75 Estimated 2006 $38.5 2015 $60.28 Actual 2005 $36.3 2014 $58.04 2004 $34.4 2013 $55.72 2003 $32.4 2012 $53.33 2002 $29.6 2011 $50.96 2001 $28.5 2010 $48.35 2000 $27.6 2009 $45.53 1999 $24.4 2008 $43.2 1998 $23.2 2007 $41.2 1997 $22.1 Table 1 CEO Personal Travel CEO Individual CFO Individual Business Travel Business Travel CEO and CFO Business Travel Together Veterinarian Emergency Travel Total Utilization Year 1 Utilization 30 (hours) 130 110 50 20 340 Year 2 Utilization 40 (hours) 160 130 90 50 470 Anticipated Year 3 Utilization (hours)
