Quantitative Methods for Business Essay

In January 2008, northern Airlines merged with selenium Airlines to create the fourth largest U.S. carrier. The new North-South Airline catching both an aging egest of Boeing 727-300 aircraft and Stephen Ruth. Stephen was a surd former secretary of the navy who stepped in as new chairman and chairman of the board.Stephens depression concern in creating a financially significant company was maintenance make ups. It was commonly surmised in the airway industry that maintenance costs rise with the jump on of the aircraft. He quickly noticed that historically on that point had been a significant difference in the report B727-300 maintenance costs (from ATA Form 41s) both in the airframe and engine areas between Northern Airlines and southeastern Airlines, with Southeast having the newer slip by.On February 12, 2008, Peg Jones, vice president for operation and maintenance, was called into Stephens office and asked to study the issue. Specifically, Stephen treasured to know whether the aver mount fleet ripen was agree to target airframe maintenance costs, and whether there was a kindred between average fleet age and direct engine maintenance costs. Peg was to report tolerate by February 26 with the answer, along with quantitative and pictorial descriptions of the relationship.Pegs first step was to direct her staff construct the average age of Northern and Southeast B727-300 fleets, by quarter, since the introduction of that aircraft to expediency by each airline in late 1993 and archeozoic 1994. The average age of each fleet was cypher by first multiplying the agree number of schedule days each aircraft had been in service at the pertinent point in time by the average daily role of the respective fleet to total fleet hours flown. The total fleet hours flown was and then divided by the number of aircraft in service at that time, giving the age of the average aircraft in the fleet.The average utilization was found by victorious the actual total fleet hours flown on family line 30, 2007 form Northern and Southeast data, and dividing by the total days in service for all aircraft at that time. The average utilization for Southeast was 8.3 hours per day, and the average utilization for Northern was 8.7 hours per day. Because the available cost data were compute for each yearly period ending at the end of the first quarter, average fleet age was calculated at the same points in time. The fleet data are shown in the following table. Airframe cost data and engine cost data are both shown paired with fleet average age in that table.