managing d&s.ppt(work in progress)

8/7/2019 Managing D&S.ppt(Work in Progress)

1/19

Managing Demand & Supply

in Airline Industry

Team Member-

Umesh Patre-14

Mahesh Rajput-15

Himanshu Sawant-16

Shrutika Kalghatgi-17

Neha Khandare-18

Kunal Shah-38


2/19

Cycle of Service for an Airline

Leaves

Airport

Receive

Baggage

Arrives at

airport

Customer requestsschedule

information Makesreservation

Checksbaggage andchecks in forflight

Proceeds to gateand security check

Receives

boarding pass

Boards

aircraft

Receives

in-flightservice

Plane Departs


3/19

Objectives :

I. Present the implications of time, labor, equipment, and facilitiesconstraints combined with variations in demand patterns.

II. Lay out strategies for matching supply and demand through

(i) shifting demand to match capacity or

(ii) adjusting capacity to meet demand.

III. Demonstrate the benefits & risks of yield management strategies inforging a balance among capacity utilization, pricing, market

segmentation, and financial return.

IV. Provide strategies for managing waiting lines for times whencapacity and demand cannot be aligned.


4/19

Constraints on Capacity

Nature of the Constraint Type of Service

Time LegalConsultingAccountingMedical

Labour Law firmAccounting firm

Consulting firmHealth clinic

Equipment Delivery servicesTelecommunicationNetwork servicesUtilitiesHealth club

FacilitiesHotelsRestaurantsHospitalsAirlinesSchoolsTheatersChurches

Nature of the

Constraint

Impact on Airline

services

Time Flight delay during bad-weather

Labor Stringent presence of unionlabor

Equipment Limited amount of aircrafts

Facilities Due to recession in past ,allcomplimentary serviceswere/are called off


5/19

Strategies for Shifting Demand to Match

Capacity

Use signage to communicatebusy days and times.

Offer incentives to customers

for usage during nonpeaktimes.

Take care of loyal orregular customers first.

Advertise peak usage timesand benefits of nonpeak use.

Charge full price for theserviceno discounts.

Use sales and advertising to

increase business from current

market segments.

Modify the service offering to

appeal to new market segments.

Offer discounts or price

reductions.

Modify hours of operation. Bring the service to the

customer.

Demand Too High Demand Too LowShift Demand


6/19

Strategies for Adjusting Capacity to Match

Demand

Stretch time, labour, facilities andequipment.

Cross-train employees. Hire part-time employees. Request overtime work from

employees.

Rent or share facilities.

Rent or share equipment. Subcontract or outsource activities.

Perform maintenance,

renovations. Schedule vacations.

Schedule employee training.

Lay off employees.

Demand Too High Demand Too LowAdjust Capacity


7/19

7

Strategies for Matching Supply and

Demand for Services

DEMAND

STRATEGIES

PartitioningdemandDeveloping

complementary

servicesEstablishing

price

incentivesDeveloping

reservation

systemsPromoting

off-peak

demand

Yield

management

SUPPLY

STRATEGIES

Cross-

training

employees

Increasingcustomer

participationSharing

capacity

Scheduling

work shifts

Creating

adjustable

capacity

Using

part-time

employees

Food &

beverages,Head

phones

E-booking,i-

booking,agents

Tie-up with

corporates, Business

and Econommic

Classes.

Off-Peak Prices, Early

booking benefits etc

Discounts

Run-way, Security,

Baggage Collection

Counter

Customers collecting

their baggage,

Selecting the Aircraft

as per the Demand

Pilots & Cabin C

working as per t

Flight Schedule


8/19


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18/19

Failure to Deliver

Capacity is often fixed - service perishability,

simultaneous production and consumption

Demand often cant be controlled or predicted

Result: Lost business or wasted capacity

Cant ever be regained or resold


19/19

Results of Mismatch

Demand is either above or below capacity

Excess demand - turn them away

Demand above optimal capacity - resources

are stretched in the short term

Excess capacity - resources underutilized,

often sends the wrong message

managing d&s.ppt(work in progress)

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