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QUESTION

Alabama Airlines opened its doors in June 1995 as a commuter service with its headquarters and only hub located in Birmingham.

Probability: 0.20, 0.19, 0.18, 0.17, 0.13, 0.10, 0.03

All customers calling Alabama Air go on hold and are served in the order of the calls unless the reservations agent is available for immediate service. Douglas is deciding whether a second agent should be on duty to cope with customer demand. To maintain customer satisfaction, Alabama Air does not want a customer on hold for more than 3 to 4 minutes and also wants to maintain a "high" operator utilization. Further, the airline is planning a new TV advertising campaign. As a result, it expects an increase in toll-free-line phone inquiries. Based on similar campaigns in the past, the incoming call distribution from midnight to 6 A.M. is expected to be as shown in Table 3. (The same service time distribution will apply.)

Discussion Questions:

1.        What would you advice Alabama Air to do for the current reservation system based on the original call distribution? Run a simulation model to investigate the scenario (run random numbers 100 times for the simulation in excel spreadsheet). Describe the model carefully and justify the duration of the simulation, assumptions, and measures of performance.

2.        What are your recommendations regarding operator utilization and customer satisfaction if the airline proceeds with advertising campaign?

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