American Airlines Managment Essay Research Paper American

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American Airlines Managment Essay, Research Paper American Airlines is a corporation that exhibits all of the characteristics of a firm in an industry where good tactical management is the key to long term sucess and survival. The airline industry is a prime example of a market where cutthroat competitive activity is the status quo. Airlines that survive in this environment do so through the understanding and continued improvement of the way in which tactical management tasks are addressed. Success is dependent upon doing all of these tasks well including demand forecasting, logistical programming, marketing and production. The key point to remember is that since American Airlines is a tactical entity, its key area of concentration is equilibrium maintenance. A continual

endeavor must be made to match supply closely to demand, especially anticipated demand. If it is not likely that production can be amended to more closely match demand, then promotion should be used to affect demand. American Airlines dedicates large amounts of time and resources to the types of facilities necessary to support the tactical management tasks noted above. This report is an attempt to illustrate the types of information system requirements of each task in the tactical management sequence, as well as describe some of the systems and methods used by American Airlines. In addition, this report offers some off the shelf alternatives, where they exist, which could handle many of the same requirements, albeit on a smaller scale. Since demand forecasting is one of the key

drivers of production, i.e. how many products a firm should supply, this will be the first management task to receive consideration. All firms engaged in activities as a tactical entity will, in some form or another, attempt to get a handle on expected demand for their products within a certain future time period such as a week, month, quarter or year. The main thing to bear in mind is that this is a tactical environment and, aside from any earth shattering new developments or shocks to the existing environment, forecasts for expected demand/maximum-likelihood share of market may be made with a fair degree of accuracy with little variance. There are several key points that are important to this process which must be considered when making a next period forecast of demand. These

items include, but are not limited to, intelligence concerning activities of competitors, market projections for the industry by industry insiders/analysts, and a great deal of historical data. Competitive intelligence is a parameter which attempts to add subjective background to the environment in which demand forecasting is carried out. Information comes from a variety of sources such as secondary information gathered from written sources, direct observation, and from competitors themselves through press releases, industry gatherings and trade journals. This information provides some indication of what the competition plans to do as far as pricing, new products, promotions and distribution/sales. This data has a dual purpose since it may also be used within model based

contingency planning when management scrutinizes competition in an effort to uncover developing threats and opportunities. Experienced tactical managers have the valuable ability to incorporate this type of information, which is not easily quantifiable, as a complement to the numerical aspects of demand forecasting. However, this is not to say that there is no information system requirement for this input into the demand forecasting process simply because it is difficult to assimilate into an objective, quantifiable form. On the contrary, a database should be set up in the context of an expert system to contain information gathered on competitors. It must be readily accessible, updated and accurate in order to aid tactical management in this process. Another input item for demand