YOU WILL ONLY COMPLETE THE TWO PARTS IM RESPONSIBLE FOR:

  • An analysis of how effective your team was in achieving organizational success.
  • Additional elements that your team feels are important to include.

REPORT:

Simulation Summary Report

Activity Instructions

For this assignment, submit the simulation summary report as described in the course project description for the Airline Simulation project. Be sure to review the Simulation Summary Report – Team scoring guide to self-assess the paper prior to submission. This report must be prepared as a team, but each member of the team must submit a copy of the report to this assignment. The individual grades on this assignment will be calculated by adjusting the overall team grade according to the results of the peer evaluations in the second assignment of this unit.

Be sure your simulation summary report includes the following:

  • Your team number, the airline name, and the names of all team members.
  • Your airline’s mission, vision, philosophy, and slogan or logo.
  • An overview of your airline’s strategy.
  • An analysis of how effective the strategy was in achieving the desired results.
  • An analysis of the factors that influenced your strategy.
  • An analysis of how internal and external factors influenced your strategies and decisions.
  • An analysis of your financial results.
  • An analysis of how effective your team was in achieving organizational success.
  • Additional elements that your team feels are important to include.

The length of this report will vary from team to team, but the report should be of 750–1,500 words, plus the financial statements. Include an introduction and be sure your report is professional in appearance and organization. Support your analyses with references to at least three professional or industry-related resources. Follow APA sixth edition guidelines for references and citations.

Mission

Vision

Philosophy

Slogan/Logo

Strategy Overview

Analysis of how effective the strategy was in achieving the desired results

The strategy Agile Airlines proposed to accomplish its vision was to “survey our customers and analyze the findings as a means to further develop and evolve our business”. I do not think this was a feasible strategy for the type of situation we were in. We did not have a clear understanding when we were creating this strategy of how we would even do surveys within the course. Our main focus and vision was to provide great customer service and by doing so we would gain and retain customers. A more feasible strategy and something that aligned more with our vision and mission would have been “creating value through excellent operations”. This statement summed up the direction and goals we were trying to accomplish in the beginning. To reach your goals, you need to master your operational processes. This process includes monitoring outstanding supply chain management, super efficient operations to control costs, cycle time and quality, and inventory management (Develop Your Strategy’s Mission, Vision & Values, n.d.). Companies that continue to offer the best buy or lowest cost through their excellent internal operations include Walmart, Southwest Airlines, Dell, and Ikea (Develop Your Strategy’s Mission, Vision & Values, n.d.).

.

Reference:

Develop Your Strategy’s Mission, Vision & Values. (n.d.). Retrieved from https://onstrategyhq.com/resources/developing-your…

Analysis of the factors that influenced your strategy

Agile Airlines began its venture on a desirable path for the first few quarters of its operation. Unfortunately, the results from the fourth decision did not yield the projected outcome as intended. With decreased profits, our airline did not cease its ability to provide excellent service to our clients hence why we maintained an average reliability of 98%. Our company took many risks and wagered most of them on the basis of receiving higher returns. We utilized the resources available to us and purchased a few more to scope out the competition. Key factors that influenced our strategy were fuel cost, the number of seats sold in the previous period, newsletter indications and non-fuel cost which would include personnel and charity.

Fuel Cost

Our selected fuel contract for most of the periods was to purchase 50% of fuel on the open market and 50% on contract. This strategy assisted our company by minimizing the risk that would come with an unpredictable spike in fuel price.

The Number of Seats Sold

The sales report was a great indicator of which market could potentially yield profits in the upcoming period and was used as a tool to select the most profitable regions.

Newsletter

The new letter provided useful information on our company as well as the competition. As a resource, this allowed us to have some prediction on what customers preferred and incidents that could harm our brand.

Non-fuel Cost

The included our staff and charitable efforts throughout the company. These factors also played a role in our financial decisions.

Reference

Smith, J.R., & Golden, P.A (2011).

Interpretive Simulations. Retrieved from

https://schools.interpretive.com/fsui2/index.php?token=0

Analysis of how internal and external factors influenced your strategies and decisions

In the simulation, the newsletter for each period helped us make our decisions in addition to seeing what other moves we needed to make to be financially stable. For period one, we had $6,800,000 line of credit, we sold one Beechcraft 1900 and purchased one British Aero 31 to update our fleet class. We made the decisions across the board to start having our company target a higher class and gain more of a loyal customer base. In addition, our strengths were to promote exceptional quality to customers, so our quality and training budget totaled to $25,000 in the 8thquarter. We saw our exceptional customer service pay off in quarter 7 when Agile Airlines given the ‘AM Personnel Association award for EMPLOYER OF THE REGION for integrity and employment practices’ (Interpretive Simulations, 2018).

A weakness we faced was that our operating expenses were much higher than our revenue, driven by flight operations, lease payments and fuel being main drivers. Since we were in more of a luxury market, we had to accommodate foreign routes to satisfy our customers.

An opportunity we took was in quarter four to take risks – Agile Airlines sold two British Aeros, leased two Brasilia and purchased one ERJ135, and increase our fares by 2 cents. In addition, we increased compensation to 2.50% above prevailing wage and stock bonus for all employees. This opportunity was not in our favor, as in the fourth quarter we had a net loss of $1.7 million.

The threat we faced was in quarter four with the winter weather, where we lost $0.094 per Available Seat Mile (see below):

(Interpretive Simulations, 2018).

We forecasted for quarters 5 and in the future that our profit per available seat mile would increase by offering more route options. Another threat we faced was the higher insurance underwriting costs due to terrorist activities in quarter 5.

References:

Interpretive Simulations. (2018). Retrieved from:https://app4.interpretive.com/alf16/i.php#

An analysis of your financial results

Agile Airlines ended the 2-year simulation with a net profit of ($2,994,321.00). We were hoping to be in the black, but with the risky changes in Period 4, the company was unable to get out of the negative. From the beginning at Period 0 to Period 8, our cash increased to $597,223.00 (Appendix A). Between Year 1 and 2, our gross revenue increase $6.4M (Appendix B). However, the company did not anticipate the decrease in sales during Period 4 due to the winter months. The company was performing well at the beginning of Period 4 and decided that there was a need for additional planes, as a result of additional routes needing coverage and to accommodate additional customers. Agile Airlines decided to take out a long-term loan in the amount of $4.3 million. The loan covered the cost of the new Embraer ERJ135. The company also decided that it would be best issue stock dividends, which gave 5% more shares to each stakeholder. These decisions made in Period 4, caused Agile Airlines to go in the red with a cumulative net profit of ($-1,597,828.00). The total operating expenses increased to $5.9M from Year 1 to Year 2 (Appendix 2). The company tried to return to the black by continuing to make little risks and taking in considerations of the financial burden at hand. Even with the taking little risks, the company remained in last place compared to its competitors.

An analysis of how effective your team was in achieving organizational success

Additional elements

Appendix A

Appendix B

 
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