American Airlines Managment Essay Research Paper American — страница 2

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forecasting comes from aggregate market projections. These types of analyses are readily accessible, mostly in the form of secondary information found in trade journals and economic publications. Airlines and transportation in general comprise a large industrial group within the economy of the United States and, accordingly, there is a large interest in its economic future. Wall Street brokerage firms and other financial firms are resplendent with analysts, some of which are charged with the task of tracking the airline industry?s past economic performance, as well as anticipated future projections. All of this knowledge is available from many sources and, again, wise tactical managers will take the time to incorporate it. System facilities required for this type of support for

demand forecasting are databases which can contain quantifiable economic information. Since this input to demand forecasting is quantifiable, a database with analytical utilities for ranking and analyzing stored economic projections and raw data are used. This facility may also be presented to management in the guise of a dressed up expert system containing decision table constructs which will allow them to adjust many demand forecasting parameters in order to make the most accurate forecast. Arguably the most important input into the demand forecasting process is a firm?s actual historical data from its own internal records sources. Historical sales data may be thought of as the most dependable and accurate input into demand forecasting since it is derived by the firm itself

rather than arriving in a second hand fashion from sources outside of the organization. Historical sales data is helpful not only in developing a demand forecast, but is also used as a check against post production performance when the time arrives to compare actual demand to the forecast. This information will likely come from another massive record keeping database which records sales transactions from the point of sale. For American Airlines, as well as the rest of the airline industry in general, this requirement is served through a reservation system of some kind. The reservation system must be capable of handling queries, data inflows and other types of processing from thousands of nodes. Dummy terminals, which simply display data, will not be sufficient to satisfy

reservation system requirements, and any implementation will involve connections and terminals designed to carry two-way traffic. Additional discussion of reservation systems, including specifically what American Airlines has installed, will follow later in this paper. After satisfying system requirements for generating and handling inputs into the demand forecasting process, the actual forecast derivation may be viewed as somewhat mechanical. The main management decision at this point is determining which type of probabilistic instrument to use with which analytical utility to yield the most accurate results. Some tactical managers may even require an expert system that does nothing more than aid them in selecting the proper mathematical tool to address the forecasting process.

There is an array of probabilistic techniques that can satisfy this management requirement including least squares regression analysis, weighted scenarios, Markov-based stochastic projections and others. Many tactical managers may use a combination of these facilities to arrive at a forecast with which they feel satisfied. A key point to bear in mind when discussing demand forecasting for a tactical entity is that it is central to two important aspects of the firm. The demand forecast is viewed foremost as the progenitor of the firm?s production for which it is the main, direct input. However, it is also an indicator of the general trend of the firm?s revenues over time. A forecast whose extrapolation to the next period indicates a decline in revenues may be an early warning of

something novel in the industry or indicative of a paradigm shift toward a new era. This aspect of troubleshooting will be discussed more at length in a later section concerning requirements for process control. The demand forecast sets the stage for the next management task– logistical programming and its accompanying system requirements. Logistical programming is the task charged with accumulating proper amounts of the factors of production in the proper place at the proper time. The four factors of production (material, finance, equipment and manpower) have certain input requirements which determine the amounts of each factor to apply to the production process. Each of these inputs will necessitate the use of some type of information system to aid tactical managers in