Southwest airline: A proposal has been made to offer a business class on its lon

Question

Southwest airline: A proposal has been made to offer a business class on its longer flights. This class would have more comfortable seats, more legroom, and complimentary magazines, movies, meals, drinks, and Wi-Fi. A toilet would be dedicated to this section. These passengers would also get priority boarding and de-boarding of flights. If the experiment is successful Southwest would consider rolling out business class on all its flights.

Question: What role do the other functions (specifically, Finance, Marketing, and HR) have to play in examining the feasibility of this idea and successfully implementing it?

Also, how can southwest implement this proposal successfully? from the point of view of finance, marketing, and Human resources?

question 2: What does the operations function have to do to examine the feasibility of this proposal

and get ready for its implementation?

Explanation / Answer

1. Finance – The function of finance will help the company to do feasibility analysis of this proposal. The finance department can do a benefit cost analysis using the benefit cost ratio. This ratio is computed by dividing the present value of benefits by the amount of initial investment. If this ratio is more than one it will mean that the project is feasible. Basically the finance department will use the cost and revenue estimates and determine if this decision will (or will not) accrue profits to the airline company.

Marketing – This department will be involved in marketing research to determine the size of the market and potential pricing points. The marketing department will also develop a comprehensive marketing plan to promote this new business class that is being introduced.

HR – The HR department will help the company by properly training employees associated with the new business class. In-flight services at the business class are several notches higher than the services being provided in the economy class. As such HR will have to ensure that employees are properly trained for this change.

Southwest Airline can implement this proposal successfully by clearly communicating all aspects of the proposal to the different departments like finance, marketing and HR. This will enable the departments to work in synchronization and achieve the common objective of making the business class a success in future.

2. To examine the feasibility of this proposal the operations function will look at aspects like optimizing the seating arrangements (through use of models like linear programming or algorithms), scheduling the entry and exit of passengers to minimize the waiting line and computing of incremental operational costs associated with the proposal. It will also help with regards to quality management, process and capacity design and layout design. All these functions of the operations department will help with the implementation of the proposal.

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