Quarter 1 and 2 Team

Team D- Decision Quarters 1 & 2 Summary

Gilbert Garcia

Andrei Iacoban

Mai Lee

MGMT 440

Professor Scott Stevens

January 26, 2014

Introduction

The decision for Quarter 1 was made from the practice round because we ranked first. A majority of our decision came from the practice round and we’ve inputted that towards our first quarter since we did well so no a lot was really changed. During our 2nd round, we aimed more towards the luxury fare structure so there were a few changes. These changes will be discussed as below.

Fares

We made the fare price at $.38 cent per mile during the 2nd quarter because we are trying to aim towards the luxury fare structure as this simulation proceeded. We provided the same cabin service such as free soft drinks, snacks, and a small meal for certain flights.

Marketing/Advertising

Our promotion and advertising budget were average in the industry during both quarters. We wanted to increases sales and customer awareness as before but we also knew we had to watch our budget. Therefore during the 1st quarter, we reduced the promotion budget to 4,000 instead of 5,000. We hired on 3 salespersons during the first quarter and saw that the industry average was 2, so during the 2nd quarter we decided to let go of one of them hoping to save on our expenses.

Compensation

Our budget stared off at $10k since we value our employee as much as our customers and would like for our employees to get the proper training they needed to help our customers. However, going towards the 2nd quarter, we decided to lower our budget to $5k which was the average in the industry. The compensation was 1% prevailing wage for all employees.

Fleet

We leased 1 Embraer Jet and 3 British Aero 31’s. We sold one Beechcraft 1900. In total that gave us 6 planes in our fleet. We had a level 3 maintenance and purchased fuel as 50% on open market and 50% on contract. We sold another one of the Beechcraft in round two as we made changes with rounding out...