National Air is a competitive air-express firm with offices around the country. Frank Smith, the Chattanooga, Tennessee, station manager, is preparing his quarterly budget report, which will be presented at the Southeast regional meeting next week. He is very concerned about adding capital expense to the operation when business has not increased appreciably. This has been the worst first quarter he can remember: snowstorms, earthquakes, and hitter cold. He has asked Martha Lewis, field services supervisor, to help him review the available data and offer possible solutions.

Service Methods National Air offers door-to-door overnight air-express delivery within the U.S. Smith and Lewis manager a fleet of 24 trucks to handle freight in the Chattdisanooga area. Routes are assigned by area, usually delineated by zip code boundaries, major streets, or key geographical features, such as the Tennessee River. Pickups are generally handled between 3:00 p.m. and 6:00 p.m. Monday through Friday. Driver routes are a combination of regularly scheduled daily stops and pickups that the customer calls in as needed. These call-in pickups are dispatched by radio to the driver. Most call-in customers want as late a pickup as possible, just before closing (usually at 5:00 p.m.). When the driver arrives at each pickup location, he or she provides supplies as necessary (an envelope or box if requested) and must receive a completed air waybill for each package. Because the industry is extremely competitive, a professional, courteous driver is essential to retaining customers. Therefore, Smith has always been concerned that drivers not rush a customer to complete his or her package and paperwork.

Budget Considerations
Smith and Lewis have found that they have been unable to meet their customers’ requests for a scheduled pickup on many occasions in the past quarter. Although, on average, drivers are not handling any more business, they are unable on some days to arrive at each location on time. Smith does not think he can justify increasing costs by $1,200 per week for additional trucks and drivers while productivity (measured in shipments per truck/day) has remained flat. The company has established itself as the low-cost operator in the industry but has at the same time committed itself to offering quality service and value for its customers.

1. Is the productivity measure of shipments per day per truck still useful? Are there alternatives that might be effective?

In my opinion, productivity measure of shipments per day per truck still useful. According to this process Frank Smith can get specific information daily about ratio of shipment per day. This method can easily measure amount of services per day. However, some workers are dispatched with some area, for that Smith can approximately figure out that the one diver can cover how much area. Also, he can find out amount of shipment for each area. Therefore, he can split the drivers that more people should dispatched on busy area. However, he can measure the productivity of cash per day per truck, therefore he can calculate profit directly. When the profit is increase, then he can use additional cost for add truck or driver.

2. What, if anything, can be done to reduce the daily variability in pickup call-ins? Can the driver be expected to be at several locations at once at 5:00 p.m.?

I think Smith need to arrange the time schedule with customer’s ship time for solve this problem. Driver never rush a customer to complete his or her package and paperwork, and it spend long time. Therefore, Smith can get more customer’s information and organize it in computer, then diver can reduce shipping time. They can find out customer’s schedule and manage it for simplify driver’s sphere of action. Moreover, information sharing is one of most important point for reduce their miscommunication between office, customer and driver. Driver must know complete information about customer’s location and time. For that drivers can locate on time.