Airline Industry Analysis & Case Studies

OPERATIONAL AND
PROJECT MANAGEMENT

TABLE OF CONTENTS
(B) Case of Harvey Talbot..........................................................................................................3
(c) Case study of Denton Grange hotel.......................................................................................4
(d) Case of Mustang airways.......................................................................................................5
(e) Turista charters......................................................................................................................6
(g) Bagage handling problems at Denton airport........................................................................7
(h) Case study on Air Norfolk ....................................................................................................7
INDEX OF TABLES
Table 1: Estimation of cost to the firm due to free night service.....................................................4
Table 2: Projected figure of revenue for Mustang airlines..............................................................5
Table 3: Computation of profit on various alternatives...................................................................7

(B) Case of Harvey Talbot
There are two alternatives and one of them is buying goods in bulk quantity which will
reduce cost of procurement for the firm. The second alternative which firm can use is EOQ for
inventory control. In order to identify viability of these two alternatives, it is necessary to
evaluate it. Same are discussed below. EOQ- It is a technique which is used to control stock at the workplace. By using EOQ
formula quantity that company needs to keep in its warehouse in order to meet demand of
custoemers on time is determined. When that inventory comes to an end inventory
manager places an order for purchasing of raw material. Hence, in this way stock holding
cost gets reduced for the firm. Use of this technique will indirectly lead to control cost of
procurement for the firm. If the firm will order raw material when required then it will be
in the position to purchase raw material up to that quantity which is appropriate for it in
order to meet demand of customers. Hence, firm will not purchase coffee bins in extra
quantity and in this way this method will indirectly help the company in controlling its
procurement cost. Bulk purchase- This is another alternative that can be used by the firm for controlling its
procurement cost. Under this, companies purchase raw material in huge quantity from
suppliers and get a discount on the same. Hence, if firm adopt this method then it will get
discount from its suppliers and this will lead to low cost of procurement for the firm. So,
both these methods will be beneficial for the firm.
Merits and demerits of these methods EOQ- The main merit of this method is that it is easy to apply this technique and same
helps in determining a quantity that firm must order to meet its requirements. The main
demerit of this method is that with change in time, demand also changes and some time
sharp increase or decrease is observed in the same. Hence, if firm strongly rely on this
method then some time stock may be excessive in the warehouse or vice-verse.
 Bulk purchase- The main merit of this method is that no big calculation is required and it
saves cost for the firm. If raw materials are purchased in bulk then firm is not required to
place order frequently. On other hand, it is getting discount on bulk purchase which lead
to low procurement cost. Hence, huge amount is saved if firm follow this alternative, but
the only limitation of this method is that sometimes it can be happened that firm