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1. Vendor Cost Comparison
Examine the passenger forecast to calculate peak number of passengers handled each day and select the least expensive vendor.
2. Convert passenger forecasts into gate agent requirements in each shift for each day of the week and then find the total number of employees to be hired for each shift.
See details below:
Appendix 1
Ray: Do we need to look at other factors aside from costs to select among these vendors?
Patricia: No, we just want to look at the costs. All three are reputable and responsive vendors. Sarahs summary also has our forecast for the number of passengers to be handled at these gates.
Appendix 2
The second thing I would like you to do is to develop a project management plan for completing the new gate areas. Based on our prior experience with such projects, we have developed a work breakdown structure. Sarah has a copy of it. What are our chances of getting the whole job done in about two months?
Appendix 3
Ray: I will use a CPM technique to develop the plan.
Patricia: That sounds great. We will be using the new gates starting from 6 AM to 10 PM every day of the week. As you know, all our employees work two shifts, morning shift from 6 AM to 2 PM and the afternoon shift from 2 PM to 10 PM. I need to tell David about the number of new customer service people we need to hire for the additional gates. I promised to get back to him in a week.
Ray: From the passenger forecast, I can use our regular rule of one agent for every hundred passengers. I will also make sure that every employee gets two consecutive days off. I will also add the usual 10% additional staff to cover vacations, sick-days, and absenteeism.
Patricia: You seem to be a quick learner and your knowledge of our operations is a definite plus. One last thing which you may be able to help me with this week is responding to Paul, our V.P. of communications, about delays in our flights. Typically, in our industry, three to fifteen percent of the flights are late. Paul wanted to know how we are doing compared to the industry. I had asked flight operations to send the sample data about flight delays.
Appendix 4
Ray: I believe I can make conclusions from this data and prepare a response for Paul for your approval.
Patricia: Ray, do you think you can do these tasks for me in a week?
Ray: I am fairly confident that I could do these four tasks in a week.
Patricia: Look Ray, I cannot promise anything but think of this week as a trial period. Give a memo summarizing what you have done by the end of the week. If you find this kind of work interesting and you can take over these types of tasks from me, I would ask my boss to create an operations manager position. If it does not work out, your current position is still there for you.
Appendix 4 Flight Delay Statistics (Prepared by Flight Operations) Notes: - A random sample of 50 flights was taken over a 30 day period. - A flight more than 20 minutes late is classified as a delayed flight. - The airline industry's lower and upper (3-sigma) control limits for delayed flights are 2% to 15%. - The average of delayed flights for the industry is 8%. After several meetings with vendors, the fixed cost and the variable cost proposed by each of the three vendors have been finalized. The results are shown in the table below. Notes: - The fixed costs for each vendor include all flooring, wall paneling, ceiling, electrical, telecom wiring, and plumbing work. - The tasks to be performed by each vendor and the time estimates for completing each tasks have been finalized. In order to permit an Apple to Apple comparison of costs, all three vendors were asked to use the same time estimates. - Eco-Jet will need to supply the final plans for wiring, electrical work, network jacks, and plumbing plans. - Eco-Jet will also be responsible for acquisition of chairs, tables, ticket counters, fixtures, and other furniture. The vendor will be responsible for all installation. - All three vendors have worked with Eco-Jet before and there is no significant difference between dependability and quality of vendors. - The total variable costs will depend upon the peak hour design capacity of the gate area expressed in terms of the maximum number of passenger departures per hour. Appendix 1 Passenger Forecasts for the New Gate Area at Newark (To be used for facility and manpower planning) Notes: 1. The passenger forecasts for all flights departing Newark in the morning and the evening shifts has been combined together to show daily total load in each shift. The results have been rounded to the nearest one hundred. 2. Use peak hour traffic to design the passenger check-in area at the gates. The seating area should have enough capacity to accommodate the peak number of passengers. 3. The number of Eco-Jet agents (customer service personnel) in the newly built gate area will depend upon the total traffic during the eight hour shift. 4. The current rule of using one customer service personnel to handle one hundred departures during an eight hour shift seems to be working well. There is plenty of slack time built into these estimates for coffee and lunch breaks. Appendix 4 Flight Delay Statistics (Prepared by Flight Operations) Notes: - A random sample of 50 flights was taken over a 30 day period. - A flight more than 20 minutes late is classified as a delayed flight. - The airline industry's lower and upper (3-sigma) control limits for delayed flights are 2% to 15%. - The average of delayed flights for the industry is 8%. After several meetings with vendors, the fixed cost and the variable cost proposed by each of the three vendors have been finalized. The results are shown in the table below. Notes: - The fixed costs for each vendor include all flooring, wall paneling, ceiling, electrical, telecom wiring, and plumbing work. - The tasks to be performed by each vendor and the time estimates for completing each tasks have been finalized. In order to permit an Apple to Apple comparison of costs, all three vendors were asked to use the same time estimates. - Eco-Jet will need to supply the final plans for wiring, electrical work, network jacks, and plumbing plans. - Eco-Jet will also be responsible for acquisition of chairs, tables, ticket counters, fixtures, and other furniture. The vendor will be responsible for all installation. - All three vendors have worked with Eco-Jet before and there is no significant difference between dependability and quality of vendors. - The total variable costs will depend upon the peak hour design capacity of the gate area expressed in terms of the maximum number of passenger departures per hour. Appendix 1 Passenger Forecasts for the New Gate Area at Newark (To be used for facility and manpower planning) Notes: 1. The passenger forecasts for all flights departing Newark in the morning and the evening shifts has been combined together to show daily total load in each shift. The results have been rounded to the nearest one hundred. 2. Use peak hour traffic to design the passenger check-in area at the gates. The seating area should have enough capacity to accommodate the peak number of passengers. 3. The number of Eco-Jet agents (customer service personnel) in the newly built gate area will depend upon the total traffic during the eight hour shift. 4. The current rule of using one customer service personnel to handle one hundred departures during an eight hour shift seems to be working well. There is plenty of slack time built into these estimates for coffee and lunch breaks
