Discuss the role of sensitivity analysis may play in the dss

Assignment Help Business Management

Reference no: EM133792014

Homework: Business

This is your first group research homework. You must deliver one group report which should include two parts made of several essays. The essays must respond to two major research writing tasks (answering multiple questions) seen described below. Your report must be a minimum of 12 pages. Your report must be submitted online on our course website (in Canvas).

Read the following two related papers on (i) DSS application to Yield Management at American Airlines, and (ii) two related papers on DSS application to US Military Housing Management. Write two essays to answer the questions seen detailed below. (Again, your report must be no less than 12 pages long). Conduct research to find out the latest information related to the works described in the two DSS applications. Use the information you will discover to support your arguments. Submit a well-organized work, including a table of contents (plus a brief introduction, one or more body parts, and a conclusion). Most importantly, please make sure to cite (i.e., give credits to) all of the works you use in your report.

Task:

Essay I: This essay must be at least six pages long.

Do read the paper seen in PDF file entitled "Yield Management at American Airlines." Also, please do check a number of short discussions and lectures posted on YouTube presenting various concepts and views on the general subject of "Revenue Management.'

I am convinced that you are likely to reach the conclusion that a revenue management, system like the one at American Airlines (AA), must be flexible and adjustable to ever-changing reservation status. Conceptually, each time a reservation is accepted for an origin-destination-itinerary fare that is at its capacity, the DSS model should be updated and resolved to obtain new seat allocations along with the revised bid price information. Obviously, updating the allocations on a real-time basis may not be practical because of a large number of itineraries involved. However, the bid prices from a current solution and some decision rules can enable the decision maker, or makers (i.e., the reservation managers, or reservation agents, or anyone in charge of the decision-making situation) to make decisions that improve the revenue for the firm.

Question A: Economic theory states that the optimum net revenue occurs at a point where marginal revenue equals marginal cost. Does this apply to the overbooking situation? Discuss this question in terms of Figure 2 seen on page 2 of the paper.

Question B: Briefly suggest how the DSS model should be updated to generate new seat allocations and revised bid price information. Include such decision factors as overbooking level, sale forecast and estimates for the recapture probabilities, full and discount fare information, and traffic management, etc.

Question C: What relationship do you think exist between the optimum overbooking level and the recapture probability? If the recapture probability increases, would the overbooking be higher or lower? Please explain clearly with an example.

Question D: Briefly describe how you would apply yield management concepts to promotional rates in the car rental industry. List and illustrate 2 to 3 similarities and differences with the problem of "Yield Management at American Airlines" as discussed in the paper.

Essay II: This essay must be at least six pages long.

Read the following two related papers on a DSS application in the US Army Housing Management and answer the following 5 questions in an essay. Find out the latest work in this area and include it in your discussion; of course, you must provide the appropriate citations.

Question A. Discuss why was this DSS needed? And in your opinion, what are the factors contribute to the success of the DSS?

Question B. Discuss both the financial and non-financial benefits that resulted from this DSS.

Question C. In your opinion what is the model-based foundation of this DSS? Why? Discuss the role of forecasting in this DSS?

Question D. Discuss the role of sensitivity analysis may play in this DSS.

Question E. Discuss how the system might evolve to handle additional related decision-making situations (including military housing and non-housing related decisions).

Reference no: EM133792014

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