An airline company must plan its fleet capacity and its long-term schedule of ai

Question

An airline company must plan its fleet capacity and its long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percent utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 98 customers for this flight segment in three years, what capacity requirement should be planned? Assume that management deems that a capacity cushion of 20 percent is appropriate The needed capacity requirement is customers per day. (Enter your response rounded up to the next whole number)

Explanation / Answer

Answer is 123 customers per day

Explanation

Average number of customers per day = 70

Utilization rate of the equipment assigned to the flight segment= 65%

Demand expected to increase in three years = 98 customers

Capacity cushion= 20 percent

With capacity cushion 20%, the number of customers that can be served now = 70/ 1- 0.20

= 70/0.80 = 87.5

The demand is going to increase to 98 customers in three years.

Hence the percentage of increase in demand= (98-70)/70 x 100%= 40 percent

The capacity requirement in three years= 87.5+ (87.5*0.4) =122.5

When we round off the answer to next whole number,

  The capacity requirement to be planned= 123 customers per day.

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