Airline Background - Business Decision Making - ثاني ثانوي

15 The Airline Project www.ien.edu.sa In this project, you will use Microsoft Excel to build a decision support model and determine how to best allocate an airline's fleet of aircraft to various destina- tions. This project will introduce the key factors that affect resource allocation deci- sion making. It is vital to understand company aims and objectives in order to ensure that any decisions made about resource allocation meet strategic require- ments. This chapter will focus on using Solver to determine the effects of resource allocation decisions on company objectives. You will explore how calculations can be used to minimize costs and maximize resource usage and effects on profit margins. You will be able to change the data to optimize the profit the airline is able to make. Finally, you will produce an analytical report that summarizes the data and provides evidence to support a professional recommendation to senior manage- ment. This time, you will need to complete this independently, with minimal guidance from the book or your teacher. You will also need to prepare a short presentation explaining your findings. This will show your skill in understanding company objectives and resources, and creating professional presentations using different communication methods. LEARNING OBJECTIVES Once you have completed this chapter, you should be able to: 1 Classify the types of variables when allocating resources 2 Apply variables to complex business settings 3 Represent information and highlight patterns and trends in data 4 5 Construct a a DSS model used to assign scarce resources . Recommend the best model to meet company objectives وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 487 The Airline Project 487 30/06/2023 14:29

488 15 Chapter رة ا Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 488 Airline Background Airline Company provides passenger transportation services and small-parcel logistics to major metropolitan areas in the Saudi Arabia region. The company operates in a hub-and-spoke fashion with the headquarters in Riyadh, serving the following cities: Jeddah, Medina, Dammam, Rafha, Yanbu, Abha, and Najran. A hub-and-spoke system routes air traffic from a group of smaller airports through one major airport (the hub). This means travelers and cargo going from one small airport to another will need to transfer to another aircraft at the larger airport in order to reach their destinations. Considering the huge competition that the airline industry has seen in recent years, management has determined that the current manual scheduling system can no longer produce the most cost-effective plane allocation to the various routes. You have been hired as a new consultant to develop a DSS model for Airline Company. Your completed model will be used to assign the plane fleet to its seven destinations while minimizing costs. The model requires the following data, which the management team has com- piled for you: . data for the four different types of planes in the fleet: - passenger capacity - cargo space - operating cost per kilometer (includes fuel, labor, and overhead) - number of available planes. ticket pricing to each destination cargo pricing to each destination distance from Riyadh to each destination. In addition, the operations department has given you information about the passenger and cargo demand for each city. 30/06/2023 14:29

وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 489 FIGURE 15-1: Airlines need to monitor and manage their resources carefully to maximize profitability To satisfy passenger requirements and cargo demand, your Solver model will assign planes by number and type to each destination. The model will also cal- culate daily revenues from both passenger service and cargo shipment, as well as the total daily operating cost. The results of these calculations will be used to create a daily gross profit statement. You will run Solver first to minimize the total operating cost. Next, you will run the modified model to maximize daily gross profits. You will need to make recommendations to management about scheduling strategies that will meet either, or both, of these objectives. Airline Company Fleet The company's fleet consists of 50 planes made up of four different models: Boeing 717 Bombardier CRJ700 Embraer E170 Airbus A220. The Airline Project 489 30/06/2023 14:29