Regional Airlines Case Study

Case 2 regional Air railroad lines Case 2 regional Airlines Case Introduction A+ for effort, Customer Service Pays for Itself In an extremely regulated and thus comparatively uniform industry such as the commercial airway industry, the prosperous air hose is the organization which sets itself apart from the competitor. Within an industry that requires guest readying to interface with flight schedules and security measures, a major operational setting which can aid an airline in gaining an edge on the competition is customer dish.The effective consumption of air travel (finding flights, buying books, acquire through the airport, boarding a plane, and fin every(prenominal)y r from each oneing the final destination) is non the same simple consumer supplier relationship that the consumer experiences in a go through the Wal-Mart checkout counter the nature of air travel makes the interaction mingled with the airline and the customer very Byzantine.Almost every facet of the complex relationship between the airline and customer can generate a large amount of stress for the consumer consumers find abject customer tolerate on in the face of tight travel deadlines and paid for travel plans that did non necessarily go as int blockadeed extremely frustrating. Analysis look into Salient Case Issues To capitalize on offering a laid-back level of effective customer service, an investment must be made.The airline must ensure their customer service subdivision not unless understands that customer service is highly valued in the organizational surround solely as well must ensure that the customer service department has the tools and resources to offer effective customer service (Graham, 2012). Like any vexation investment, the organization must make smart decisions when providing customer service resources for represent a shoot the breeze center of fifty holdees which only(prenominal) serve ups dickens c eithers an magazine of day is a humongous waste of resources that would be better allocated towards an separate goal.The business of understand that an investment towards more effective customer service is indispensablenessed, but at what cost to make that investment, is the problem which faces Regional Airlines in the drive study on page 539 of the 2012 Anderson, et al, text An Introduction to Management acquirement Regional Airlines is expanding its customer service operation by setting up a sure b install outline of rules for the purpose of providing ticketing services and customer assistance over the prognosticate.The airline is going ahead with the pertly ph nonp aril scheme however, twain major decision points exist, how many constituents to allocate to the line (one or twain) and what complexity of strategy in which to invest (a form that domiciliates a holding function versus one that does not). The expected announce payload for the new operation is one call every 3. 75 legal proceeding, availab le poetic rhythm indicate that on each call a ticket broker spends 3 proceedings with a customer effectively this results that for every customer attended to, there leave be 45 seconds of down snip (Anderson, et al, 2012).Unfortunately for Regional Air, those figures argon only averages, there go out be an indeterminate amount of calls which pile up or exceed the 3. 75 minute span in between calls. The decision between governances which provides a hold function versus the one that does not allow determine depart determine if that customer is placed on hold or if the call is just dropped. Placing an unanswered call on hold provides a buffer for the instrument to end the call and so(prenominal) service the holding customer however, for a customer that stays on hold for an inordinate amount of time go away begin to sapidity less and less like a well-served customer.The expected call load versus the time it halts for an agent to deal with each call is the basis of alloca ting only one agent to man the call system. The second option of allocating two or more agents is in effect, insurance that each call lead be answered in a timely fashion and callers leave alone not have to wait for extended periods of time. The decision of how many agents to allocate to the phone system is based upon the apparent cost for an extra agent sit around not actively engaged in a call however this view is relatively short sighted because it does not take into account the revenue lost from dropped calls and dissatisfied customers.The salient issue of the pillowcase is determining what the appropriate level of investiture to make for the phone system to provide an expected (and beneficial) level of customer service Group parole Exploring Simulations Simulation is a quantitative technique get arounded for studying alternative courses of action by building a model of that system and then conducting a series of repeated trial and error experiments to predict the behavi our of the system over a period of time (Srivastava, Shenoy, & Sharma, 1989, p. 753). Of all the simulations delay line simulations are of the most important to the customer service industry.In the airline industry long postponement generation can lead to poor customer service scores and diminished sales. Regional Airlines is establishing a new telephony system for handling flight reserves (Anderson, Sweeney, Williams, Camm, & Martin, 2012). The airlines main goal is to go down the wait time at its call centers and increase sales. Regionals heed team agrees that its goal should be to answer 85% of its ingress calls in a flash. The following analyzes Regional Airlines (RA) current making system and ways to improve it. Analysis of Current administrationCurrently RA is answering one call every 3. 75 transactions during 1000 a. m. to 1100 a. m. time period (? (average reaching time) = 60 transactions / 3. 75 minutes = 16 calls per hour). The average service time is 3 minu tes per customer ( (service rate) = 60 minutes / 3 minutes = 20 calls per hour). With only one reservation agent, the probability that a caller leave behind be blocked because of a engross indicate is P1 = . 4444 ? o = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /0 (16/20)o / 0 + (16/20)1 /1 = . 5556 ?1 = ( ? / ? ) 1/0 i=1k ? /? 1 /i = ( 16 / 20 ) 1/0 (16/20)o / 0 + (16/20)1 /1 = . 444 With two reservation agents, the probability that a caller will be blocked because of a busy contract is P2 = . 1509. ?o = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /0 (16/20)o / 0 + (16/20)1 /1 + (16/20) 2 /2 = . 4717 ? 1 = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /1 (16/20)o / 0 + (16/20)1 /1 + (16/20) 2 /2 = . 3774 ? 2 = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /2 (16/20)o / 0 + (16/20)1 /1 + (16/20) 2 /2 = . 1509 Regional Airlines current phone reservation system will answer an approximate of 85% of phone calls with two employed reservation agents.However, the other 15% will be blocked because of a busy signal. Customers who do not get a hold of an agent whitethorn not call back and contribute to negative customer service response and adversely affect the business. Analysis of Agents Needed Proposed expand system will allow callers to wait. Instead of being blocked when all lines are busy, customers can choose to stay on the line and calls will be answered in the order received. With only one reservation agent for Regional Airlines in the expand system, 80% (Pw) of incoming calls will end up postponement. The average waiting time is as well as at 12 minutes (Wq).Cited numbers above show a horrendous system that is two undesirable and a business model doomed for failure. So in order for RA to realize the benefits of the spread out system, it needs to employ two or more reservation agents. Po=1- ? /? = 1-1620=0. 20 Lq = ? 2 ? (? ? ) = 16 2 20 (20 16) = 3. 2 L =Lq + ? / = 3. +1620=4 wq+Lq / ? =3. 216=0. 20 hours=12 minutes W = wq + 1/ = 0. 20 + 1/20 = 0. 25 hours = 15 minutes Pw= =1620=0. 80=80% At the provision welcomeing, Regional Airlines management team agreed that answering at to the lowest degree 85% of the calls is an acceptable customer service goal.This means that the probability of waiting will have to be 15% or less. Pw= 1k k k? k? ? Po k = 2 agents Pw= 12 16202 2 202 20- 16 0. 4286= 0. 2286 k = 3 agents Pw= 13 16203 3 203 20- 16 0. 4472= 0. 0520 Po=0. 4472 Lq=0. 0189 L=0. 8189 Wq=0. 0012 hours=0. 07 minutes W=0. 0512 hours=3. 97 minutes Using terce agents all the way welcomes the smart sets goal. With three reservation agents, only 5% of the calls will be waiting, which is way below the 15% targeted cap in order to meet the goal of 85% answered calls. Average waiting time is also at a minimum, calculated at 0. 012 hours or 0. 07 minutes. arranging Recommendation The current anticipate reservation system design does not allow callers to wait callers instead must attempt to reach a reservation agent when a ll agents are not occupied. Should callers reach the service line when all agents are busy they will be met with a busy signal. The management at RA is seeking to switch to an expanded telephone system to combat this problem. Based on the calculations in the previous paragraphs, RA will need approximately 3 reservations agents to run an expanded phone system.Group 3 recommends that the company employ the multiple channels waiting line which consists of two or more service channels that are assumed to be identical in terms of service capability (Anderson, et. al. , 2012). Regional airlines could have got at least a two-channel operation to service the needs of its customers. MANAGERIAL REPORT ASSUMPTIONS a. One call every 3. 75 minutes during 1000 a. m. to 1100 a. m. time period ? (average stretch time) = 60 minutes / 3. 75 minutes = 16 calls per hour b. Average service time of 3 minutes with each customer (service rate) = 60 minutes / 3 minutes = 20 calls per hour 1.An analysis o f the current reservation system that does not allow callers to wait. How many reservation agents are needed to meet the service goal? With only one reservation agent, the probability that a caller will be blocked because of a busy signal is P1 = . 4444 ? o = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /0 (16/20)o / 0 + (16/20)1 /1 = . 5556 ?1 = ( ? / ? ) 1/0 i=1k ? /? 1 /i = ( 16 / 20 ) 1/0 (16/20)o / 0 + (16/20)1 /1 = . 4444 With two reservation agents, the probability that a caller will be blocked because of a busy signal is P2 = . 509. ?o = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /0 (16/20)o / 0 + (16/20)1 /1 + (16/20) 2 /2 = . 4717 ? 1 = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /1 (16/20)o / 0 + (16/20)1 /1 + (16/20) 2 /2 = . 3774 ? 2 = ( ? / ? ) ? /0 i=0k ? /? i /i = ( 16 / 20 ) ? /2 (16/20)o / 0 + (16/20)1 /1 + (16/20) 2 /2 = . 1509 remainder Regional Airlines current phone reservation system will answer an approximate of 85% of phone calls with two employed res ervation agents. However, the other 15% will be blocked because of a busy signal.Customers who do not get a hold of an agent may not call back and contribute to negative customer service reaction and adversely affect the business. 2. An analysis of the expanded system proposed by the telephone company. How many agents are needed to meet the service goal? Proposed expanded system will allow callers to wait. Instead of being blocked when all lines are busy, customers can choose to stay on the line and calls will be answered in the order received. With only one reservation agent for Regional Airlines in the expanded system, 80% (Pw) of incoming calls will end up waiting. The average waiting time is also at 12 minutes (Wq).Cited numbers above show a horrendous system that is both undesirable and a business model doomed for failure. So in order for Regional Airlines to realize the benefits of the expanded system, it needs to employ two or more reservation agents. Po=1- ? /? = 1-1620=0. 2 0 Lq = ? 2 ? (? ? ) = 16 2 20 (20 16) = 3. 2 L =Lq + ? / = 3. +1620=4 wq+Lq / ? =3. 216=0. 20 hours=12 minutes W = wq + 1/ = 0. 20 + 1/20 = 0. 25 hours = 15 minutes Pw= =1620=0. 80=80% At the planning meeting, Regional Airlines management team agreed that answering at least 85% of the calls is an acceptable customer service goal.This means that the probability of waiting will have to be 15% or less. Pw= 1k k k? k? ? Po k = 2 agents Pw= 12 16202 2 202 20- 16 0. 4286= 0. 2286 k = 3 agents Pw= 13 16203 3 203 20- 16 0. 4472= 0. 0520 Po=0. 4472 Lq=0. 0189 L=0. 8189 Wq=0. 0012 hours=0. 07 minutes W=0. 0512 hours=3. 97 minutes Using three agents clearly meets the companys goal. With three reservation agents, only 5% of the calls will be waiting, which is way below the 15% targeted cap in order to meet the goal of 85% answered calls. Average waiting time is also at a minimum, calculated at 0. 012 hours or 0. 07 minutes. 3. An analysis of the expanded system proposal by the telephone com pany. A representative from the telephone company suggested that Regional Airlines consider an expanded system that accommodates waiting. In the expanded system, when a customer calls and all agents are busy, a recorded meat tells the customer that the call is being held in the order received and that an agent will be available shortly. The customer can stay on the line and listen to background music while waiting for an agent.Expanded System with waiting allowed Pw for 1 agent P0= (1-? /? ) 1-16/20=. 20 Lq= ? 2 =16(2)= 3. 2 ?(? ? ) =20(20-16) L= Lq+( ? /? )=3. 2 +(16/20)=4 Wq =(Lq/ ? )=3. 2/16=. 20 (12 minutes) W=Wq+(1/ ? )=. 20+ (1/20)= . 25 (15 minutes) Pw= ? /? = 16/20=. 80 Expanded System with waiting allowed Pw for 2 agents Pw=1/k ( ? /? )k k? / k? ? P0 1/2 (16/20)2 2(20)/2(20)-16 . 4286= . 2286 Expanded System with waiting allowed Pw for 3 agents 1/3 (16/20)3 3(20)/3(20)-16 . 4472= . 520 In order to use this system, Regional Airlines would have to use three agents to keep the customer service of 85% of the calls being answered immediately. The telephone arrival rate of incoming calls is expected to change from hour to hour. Describe how your waiting line analysis could be used to develop a ticket staffing plan that would enable the company to provide different levels of staffing for the ticket reservation system at different times during the day. Indicate the information you would need to develop this staffing plan.This analysis only covers the 1000 AM 1100 AM time frame. As we have seen with the equations used, we have to have historical info for the other time frames. If the phone lines are open from 0800AM 0800 PM, we could use the entropy from each hour. Keeping with the 85% rate of phone calls being answered immediately for good customer service and the use of the limited amount of call agents required to save Regional Airlines money, after further analysis, Regional Airlines will have the data need to make the best decisions for their compa ny. 4. Staffing PlanIn order to develop a ticket agent staffing plan that would enable the company to provide different levels of staffing for the ticket reservation system at different times during the day, a similar simulation method and analysis used above are needed. By implementing the same application, the right number of reservation agents each hour can be determined. In addition to the number of agents used, it is also possible to use the same information to determine the full-time and irregular shift schedules that meet the companys customer service goals.But in order for RA to do this, it needs the hourly average arrival rate for the whole day. 5. References Anderson, D. , Sweeney, D. , Williams, T. , Camm, J. , & Martin, K. (2012). An Introduction to Management Science Quantitative Approaches to finding Making. Mason, OH. South-Western Cengage Learning Graham, J. (2012). Think Like the Customer Or Lose the Sale. American Salesman, 57(4), 18-23. Srivastava, U. K. , Shen oy, G. V. & Sharma, S. C. (2005). Quantitative techniques for managerial decisions (2nd Edition). New Age International Publishers New Delhi.