Assignment: Quantitative Methods for Business

1904 Words Feb 24th, 2013 8 Pages
Name: Sun Puthir
Alpha Yagouba Balde
Class: MC0104 Quantitative Methods for Business
Name: Sun Puthir
Alpha Yagouba Balde
Class: MC0104 Quantitative Methods for Business
Case Study
Chapter 4

North-South Airline:

In January 2008, Northern Airlines merged with Southeast Airlines to create the fourth largest U.S. carrier. The new North-South Airline inherited both an aging fleet of Boeing 727-300 aircraft and Stephen Ruth. Stephen was a tough former secretary of the navy who stepped in as new president and chairman of the board.

Stephen’s first concern in creating a financially solid company was maintenance costs. It was commonly surmised in the airline industry that maintenance costs rise with the age of the aircraft. He quickly noticed
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.73 | 15,215 | | 75.638 | 9.092 | 9.092 | 82.673 | 10.73% | 2007 | 78.74 | 18,390 | | 83.889 | -5.149 | 5.149 | 26.509 | 6.54% | | | | | Average | | 4.646 | 27.969 | 6.61% | Intercept | 36.097 | | | | | MAD | MSE | MAPE | Slope | 0.0026 | | | | | | | | | | | | | | SE | 6.258 | | Forecast | 36.097 | | | | | Correlation | 0.877 | | | | | | | | r-squared | 0.769 | |

Northern Engine Input Data | | | | Forecast Error Analysis | | | | Year | Engine Cost per Aircraft($) | Average Age (Hours) | | Cost | Error | Absolute error | Squared error | Absolute % error | 2001 | 43.49 | 6,512 | | 37.785 | 5.705 | 5.705 | 32.550 | 13.12% | 2002 | 38.58 | 8,404 | | 42.786 | -4.206 | 4.206 | 17.690 | 10.90% | 2003 | 51.48 | 11,077 | | 49.852 | 1.628 | 1.628 | 2.651 | 3.16% | 2004 | 58.72 | 11,717 | | 51.543 | 7.177 | 7.177 | 51.503 | 12.22% | 2005 | 45.47 | 13,275 | | 55.662 | -10.192 | 10.192 | 103.872 | 22.41% | 2006 | 50.26 | 15,215 | | 60.790 | -10.530 | 10.530 | 110.878 | 20.95% | 2007 | 79.6 | 18,390 | | 69.183 | 10.417 | 10.417 | 108.524 | 13.09% | | | | | Average | | 7.122 | 61.096 | 13.69% | Intercept | 20.571 | | | | | MAD | MSE | MAPE | Slope | 0.0026 | | | | | | | | | | | | | | SE | 9.248 | | Forecast | 20.571 | | | | | Correlation | 0.783 | | | | | | | | r-squared | 0.612 | |

Southeast Airframe Input Data | | | | Forecast Error Analysis | | | | Year | Airframe
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