...------------------------------------------------- [Document title] MGT-432 November 26, 2013 Executive Summary Delta airline has a long history whose roots begin at the year 1924.This airline has grown to become one of the largest airlines serving the United States of America and also majority of the world through its international routes. The aim of this paper is to see the history of the airline together with its financial position with concentration on the various strategies the company has implemented to reach where it is right now. The paper will also include various suggestions to the airline to help it to grow further. Delta airlines began in the year 1924 but during that time it was known as Huff Daland Dusters. This was the first aerial crop dusting which had its headquarters in Georgia. The following year, the company moved its headquarters to Louisiana. The directors of the company were B.R Coad and Collett Woolman.Huff Daland went on its first international route and that was to begin its services in Peru which brought in enough money and increase in purchasing power. The year 1928 gave birth to what is known as Delta Airlines today. Furthermore, the year 1930 came with a major setback to the airline. Delta failed to secure a commercial airmail contract and therefore suffered major losses which forced the airline to suspend passenger service. As time went by, the year 1934 seemed to be the year for Delta Airlines as they secured a low-bid contract for the new Route 33 airmail service between...
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...Case Analysis Study Approach (CASA) (Read the case a couple of times) Describe the Following for this Case Study- 1. Industry & Market: Delta is in the airline industry. It is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism. There are few industries that create the amount and intensity of attention that airlines receive. Delta is the world’s largest airline in terms of both fleet size and scheduled passenger traffic. Delta’s major competitors are Southwest Airlines and United Airlines. 2. External Environment: (Factors beyond the control of the firm that influence its choice of direction and action, organizational structure, and internal processes) STEP Analysis: Social- Social factors and travel practices of individuals have extensive effects on the airline industry. There are individuals from a number of income classes and the airlines have to classify these people and ought to give them what they need. Technological- as clients’ wants develop in the future and there are more technological expectations the airline industry will have to be ready to meet their clients’ wants. Delta must keep up with competition and their technological advances such as online ticketing, booking, updating flight information, baggage check-in and handling of customer complaints all on the internet. Economical- Consumers tend to reduce travel if personal economic conditions are suboptimal, forcing...
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...Delta Song Case Analysis Possible cost drivers that will allow us to estimate a salary cost function for Delta are: available seat miles, number of departures, available ton miles, revenue passenger miles, and revenue ton miles. The two cost drivers we chose were revenue passenger miles and available ton miles. The salaries consist of payments to pilots, flight attendants and ticket agents. Their salaries are determined by the number of passengers and cargoes and the miles or hours flown. This is why we chose revenue passenger miles and available ton miles. After calculation we found that the R2 of revenue passenger miles is .1764, and the R2 of available ton miles is .5577. We used scatter plots to show this: The available ton miles scatter plot shows a more linear relationship between the two variables. Low point (3132, 1145), high point (4029, 1514) Salary=0.4114xavailable ton miles-143.50 The greatest advantage about this technique is that it only uses two data so it is convenient. The disadvantages are that the data is inefficient. This is because the data is based on cost function for only two periods, meaning it is less accurate. Simple Regression Using simpler regression to estimate the salary cost with available ton miles as the cost driver. These are the results: Coefficients Intercept X Variable 1 -682.643 0.551693 Standard deviation 282.6033 0.79698 Salary= 0.5517x available ton miles- 682.63 R2=0.5577, and the coefficients are larger than the deviations...
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...Delta 1. (a) Fuel cost drives the airline industry. Fuel cost average anywhere from 30% to 50% of total operating costs in the airline industry and crude oil and jet fuel costs had been on the rise. (b) The refining industry in the US is defined regionally by petroleum administration for Defense Districts (PADD), a system put in place during the Second World War. 2. Rising fuel cost is truly a problem for Delta. In 2011 Delta was hit hard by rising fuel cost. Deltas total fuel cost had risen by nearly $3 billion in 2011. Delta was already a company on the rebound. It closed in 2011 with $35 billion in revenue, up 10 percent from 2010, with profits up 40% to $854 million. Delta was driving profitability by flying fewer planes fewer miles with fuller seats. It had 80,000 employees worldwide and $3.6 billion in cash. Delta was the world’s largest airline in terms of both fleet size and scheduled passenger traffic and jet fuel costs were killing it. 3. Rising fuel costs were the result of growing supplies of domestic oil in the US and its inability to gain access to major refining centers like the US, East Coast and Gulf Coast districts. The rapid development and production of shale oil from domestic sources was landlocked. Pipelines were at capacity and oil was stockpiling. Transportation alternatives like railroads were costly 4. Refineries on the East coast were closing because they were suffering the highest crude acquisition cost. Although East Coast refineries...
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...Case 27 Delta Air Lines (2012): Navigating an Uncertain Environment FOF #1: Differentiation In order to compete in a pricesensitive industry, Delta Air Lines needs to focus on differentiating itself from competitors. By doing this, Delta is creating sustainability through customer retention and loyalty. To set itself apart from competitors like United Airlines and American Airlines, Delta needs to implement a program to improve customer service. Because of Delta’s poor service reputation, I believe that the company needs to primarily concentrate on offering superior customer service as a way to gain a competitive advantage. After Delta’s merger with Northwest, customer complaints increased significantly. In 2009 Delta’s customer complaints doubled the industry average, and only two years later accounted for a third of all complaints. Additionally, results from a survey done in 2011 showed that Delta had the lowest customer satisfaction rating out of Southwest, Continental, American, US Airways, and United Airways at a staggering 56%. A rating as low as that is alarming, and can easily persuade consumers to ultimately choose competing airlines. In an attempt to counter diminishing brand loyalty and reputation, Delta needs to focus on the following three issues: 1. Improving comfort This includes designing seats that accommodate passengers of all sizes for trips of all durations. Legroom should be expanded. Additionally, the airline ...
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...Title of essay: Exploring Marketing with Delta Airlines as a Case Study Tedlow, Richard S. believes that the history of consumer product marketing in the United States can be divided into three phrases.1 The history of marketing will aid us in understanding the business world today and is thus useful in this essay to explore this in brief before embarking on studying Delta Airlines as a case study to approach the topic of marketing, in the context of the U.S Airline Industry. Phrase 1 is that of fragmentation and this is purely due to logistics reasons, rather than the result of any marketing strategy. This results in transportation of bulky goods from one region to another being relatively expensive and for a consumer product to achieve national distribution, a favorable ratio of weight and bulk to value is required. This phrase happened before the 1880s and the market size is restricted due to a lack of information, and it is characterized by a high margin and low volume. The second phrase of unification is the rise of mass marketing, with high volume and a low margin, which is the direct opposite of the first phrase of fragmentation. The development of this phrase is possible due to firstly, the development of the railroad and the telegraph and secondly, innovations in manufacturing technology. All the above innovations led to a more effective transportation and communication network that lowered the cost of mass marketing products by significant percentages. There is a rise...
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...The firm claim that their partnership network with foreign IT firms, innovative and technological abilities allow the firms to exploits its capabilities for competitive advantage. However, Beta and Delta exploitation of its network and business relationships is understandable, given that Delta as Technology Company and Beta as bank. The partnership with foreign IT firms in the case of Delta are significant in delivery IT services such as in Cisco, Infosys and Infosys as one means of achieving its proficiency in IT service delivery. Delta foreign expansion, however, was a result of its technological expertise, business networks with foreign IT firms, business relationships with its large corporate customers, knowledge and experience of the...
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...Capital Budget Case- Delta Star Incorporated Description of the Company: Delta Star Incorporated is a family owned and operated convalescent care facility and the family owns other convalescent care facilities and non-related businesses. The owners want to expand their business and are considering constructing a new twenty six bed convalescent unit in a new area where the demand and reimbursement returns are similar to their present business. The second investment option being considered by Delta Star Incorporated is the construction of a new twenty six bed maximum care facility that would specialize in a maximum care equipment and care for patients requiring total respiration support and maintenance. The patient reimbursement rates are 20 percent higher in the maximum care facility, however the federal requirement for nursing hours per patient are 5 percent higher than a convalescent unit. The plan is to operate the new business venture for 10 years and then liquidate all assets. Beside the dilemma of investing in a convalescent facility or maximum care facility, the company is plagued by sloppy management and the owners believe that dietary and laundry operating costs are higher than necessary. The pro forma income statement for 1989 has not been adjusted upward for inflation for laundry and dietary services under the assumption that the future management will be more efficient and achieve a 3 percent reduction in these expenses which could affect the projected income...
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...Chapter One Introduction of Business 1.1 The company Mardi Khola Agro Farming Pvt. Ltd is the newly privately owned agro farming organization, will soon established at middle of Hemja and Lahachok VDC. It will situated at near the Mardi Khola beach with own 14 ropani land and sufficient natural crystal clear glacier water. It will firstly offer the fresh trout fish which is famous for boneless and with high protein and hygienic. Mardi Khola Agro Farming Pvt. Ltd is established by four energetic young entrepreneurs with initial capital of 1core. They will be able to utilize the waste water into best productive assets. As Mardi khola is famous for Aasala Fish same like we hope our fishery project will be famous for trout fish. 1.1.1 Corporate Vision “ to exploit the useless natural resources into agro productive assets and contribute to the agro economics of the country.” 1.1.2 Corporate Mission “ to be the number one agro business organization in the South Asia” 1.1.3 Objectives of the Company • Establish the product lines that are eco friendly, organic and hygienic. • Use the resources that are neglected and wastage. • Offer product and service that are common to the customer, but without artificially added ingredients value added ie naturally. 1.1.4 Company Ownership The Mardi Khola Agro Farming Pvt. Ltd will be founded and owned by Buddhi Karki. Being one of the MBA degree holder of the Pokhara University, the core interest...
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...DELTA HARDWARE STORE DHS-CASE DELTA HARDWARE STORE DHS-PROBLEM • • • • • • Regional Paint Retailer with 3 warehouses Restocks warehouses every month Has one Plant which is insufficient Not cost effective to expand the Plant Consider subcontracting to meet demand Determine a least cost distribution scheme DELTA HARDWARE STORE Mathematical Modeling 1. 2. 3. 4. Identifying decision variables Quantifying objective function Constructing a model shell Data gathering DELTA HARDWARE STORE Identifying decision variables Factors that the decision maker has control over are controllable inputs or decision variables that need to be determined by solving the problem. DELTA HARDWARE STORE Defining Decision Variables Decision Variable is an item under the Decision maker authority to decide numerical value of it DELTA HARDWARE STORE Defining Decision Variables Let Xij = Amount of paint to be shipped this month from i to j Where i indicates the plant or the subcontractor And j indicates one of the warehouses DELTA HARDWARE STORE Objective Objective of all optimization models is to figure out how to do the best with the available resources. Best implies Maximizing (profit) or Minimizing (cost) DELTA HARDWARE STORE Objective Minimize total monthly costs of manufacturing, purchasing, and shipping DELTA HARDWARE STORE Constraints 1 2 Limitations of resources a. Plant Monthly Capacity b. Limit amount order from subcontractor Requirements a. Fulfilled each warehouse...
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...RaeShawn Davis Sales Force mang Dr. Jackson 09/14/12 “Delta Products Company” It always seems as if the American economy has always been in a deficit, and has caused a lot of drawbacks and budget cuts in the work industry. Even today we suffer from the hole we have put ourselves in economically. In this case Tom Shilling the marketing manager of the Delta Products Company which sales microelectronic devices to other companies for there needs; is to decide rather or not he should take on new sales representative Brian Snowcroft an Arizona state graduate with a degree in electrical engineering or taking the offer of Jim Reynolds and Christina Alverez two sales people from TRW that have been laid of due to cutbacks, in order to replace Herb Hawkins the old sales rep of Delta Products Company. The problem at hand is that Tom shilling had to recently terminate his old sales rep, Herb Hawkins who had been with the delta company since they first opened due to lack of performance being put forth to help out the company, a cut back on money and not being able to afford Hawkins’s lavish lifestyle. The company’s selling cost while Hawkins was the sales reps are as followed: in 1998 $198,466 and Hawkins salary out of that cost was $85,000 with no bonuses because of his lack of sales work. So due to this Shilling proposed a new cost budget to Hawkins for the year 2000 based on his past performances and the company’s cutbacks. The new sales cost...
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...C1: MATLAB Codes t1=[37.79 39.51 38.54 39.14 39.02 39.4 39.01 37.18] t2=[22.4 22.07 22.15 21.72 21.75 22.55 22.18 21.92] T1=mean(t1) T2=mean(t2) V1=var(t1) V2=var(t2) S1=sqrt(V1) S2=sqrt(V2) MATLAB Answers T1=38.6988 T2=22.0925 V1=0.6718 V2=0.0859 S1=0.8196 S2=0.2931 C2: MATLAB Codes beta=0.98 alpha=1-0.98 z=icdf ('norm', alpha/2, 0, 1) hatmu=mean(t1); hatmu=mean(t2) s=std(t1); s=std(t2) n=length (t1); n=length (t2) margin=z*s/sqrt(8) MATLAB Answers alpha=0.02 z=2.3263 margin(t1)=0.6741; margin(t2)=0.2931 C3: MATLAB Codes syms l s b T1 T2 l=0.0496; s=1.00; b=10; T1=0.0386988; T2=0.0220925; g=((l^2)/(2*s*sind(b)))*((1/T2^2)-(1/T1^2)) MATLAB Answers g=9.7835 C4: MATLAB Codes for Partial Derivatives g=((l^2)/(2*s*sin(b)))*((1/T2^2)-(1/T1^2)) gl=diff(g,l) gs=diff(g,s) gb=diff(g,b) gT1=diff(g,T1) gT2=diff(g,T2) MATLAB Answers for Partial Derivatives gl=-(l*(1/T1^2 - 1/T2^2))/(s*sin(b)) gs=(l^2*(1/T1^2 - 1/T2^2))/(2*s^2*sin(b)) gb=(l^2*cos(b)*(1/T1^2 - 1/T2^2))/(2*s*sin(b)^2) gT1=l^2/(T1^3*s*sin(b)) gT2=-l^2/(T2^3*s*sin(b)) MATLAB Codes for Partial Derivative Values gl0=subs(gl,[l s b T1 T2],[l0 s0 b0 T10 T20]) gs0=subs(gs,[l s b T1 T2],[l0 s0 b0 T10 T20]) gb0=subs(gb,[l s b T1 T2],[l0 s0 b0 T10 T20]) gT10=subs(gT1,[l s b T1 T2],[l0 s0 b0 T10 T20]) gT20=subs(gT2,[l s b T1 T2],[l0 s0 b0 T10 T20]) MATLAB Answers for Partial Derivative Values gl0= -125.9202 gs0=...
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...Lance Welsh Case 1 (Delta’s New Song) Accounting 581 Professor Thornock Case Study Questions 1. Q. Identify several possible drivers of salary costs for use in estimating a salary cost function. Using one of these cost drivers, apply the High-Low technique to estimate the salary cost function for the Delta Airlines. What driver did you select and why? How would Delta use this function to forecast costs? What are the advantages of this technique? The disadvantages? A. Some of the possible drivers of salary cost are Number or Departures, Revenue Ton Miles, Revenue Miles scheduled, Revenue passenger miles and there are countless more you could use. High low method for revenue Ton Miles (High-2,369, low-1,580) by Salary Cost(High-1,607, Low1,037) :(2,369-1,580)/(1,607-1,037)= 789/570=1.384 I selected this driver because the revenue directly correlates to the price you could pay your employees and still turn a profit. Delta can use this to see that they are making a profit when looking at just the salary cost and the revenue they bring in. The advantages of this technique are you have concrete evidence when and if employees ask how much they are getting paid and why and the disadvantages are that the revenue Ton Miles can fluctuate over the course of a year and make it hard to base the decision of salaries on just one variable. 2.Use simple regression to estimate the salary cost function for Delta Airlines. Comment on the statistical validity and significance...
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...CASE: Delta Plastics, Inc. (B) By Sarah Wolfe ITT Have you taken the time to look at your plastic containers? Well, if you do there is a chance that your containers have flaws and defects that are noticeable to the human eye. There are defects that do not get in the way of using the containers but for quality purposes, it still is a defect. Case Questions 1. Prepare a 3- sigma control chart for both production processes, using the new and standard (use the quality report in Delta Plastics, Inc. Case A, Chapter 5). Are both processes in control? What can you conclude? 2. Are both materials equally subject to the defects? 3. Given your findings, what advice would you give Jose? 1. Prepare a 3- sigma control chart for both production processes, using the new and standard (use the quality report in Delta Plastics, Inc. Case A, Chapter 5). Are both processes in control? What can you conclude? a. The control data is based on a chart showing the type of defect as well as the number of defects for one month, a total of 20 days. The average number of defects for the standard material is 1.93 and the range is 2.6. The control limit is 2.41, the upper control limit is 3.28 and the lower control limit is .571. The average number of defects for the new material is 2.44 and the range is 4.55. The control limit is 2.41, upper control limit is 4.14 and the lower control limit is -1.73. b. I tried to put the statistics...
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...Unit 3: Assignment Chapter 5 Delta Plastics Case 1. The different costs of quality that costs that Delta Plastics has been effected by are appraisal because Jose has to analyze the monthly quality report, internal because they rushed releasing the new product without quality testing and external because the if the customer receives a defective plastic product they will not want to buy any more and will tell their friends that it is a poor product. Delta Plastics traded off the prevention cost which would have been more time spent fine tuning the plastic so that they could release the new “Super Plastic” sooner ahead of potential competitors. George Chadwick was incorrect when he decided that more tests were not necessary. Because of that decision the new “Super Plastic” has 93 defective for cracks and 71 defective for air bubbles for the month compared to the Standard Material which had 41 defective for cracks and 55 defective for air bubbles. For the other three defective categories, two of the three were within a standard deviation of each other. 2. The quality control tool that I would use to analyze the monthly quality report would be the histogram. I would use it because it easily differentiates and visually presents the data. Between the two products there was a dramatic difference in the defects for cracks and air bubbles. The new “Super Plastic” had 93 products defective for cracks and 71 defective for air bubbles for the month. The Standard...
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