Southwest Airlines Reservation Center Essay

2047 words - 8 pages

Case 4: Southwest Airlines Reservation Center Background & Problem Statement Southwest Airlines will be offering a special sale following their 30th Anniversary Sale. The "Click "˜n Save" sale will start on March 2, 2001 through March 15, 2001. This sale is valid for travel from March 9, 2001 to August 4, 2001 and reduces one-way fares down to $39 to $119 each.Due to this "Click "˜n Save" sale, Southwest Airlines expects a sudden demand surge on their flight reservation. As of now, Southwest Airlines has nine reservation centers throughout the country. The Southwest reservation center in Chicago will be examined to determine if it has enough capacity to handle this demand surge. This reservation center operates from 8:00 a.m. until midnight, with two shifts of one staff member each to handle flights 880, 881, and 882, the high demand flights to Florida during spring break season.When a customer calls the Chicago reservation center, they go "on hold" in the order they called until an agent is available to take their call. During last year's "Click "˜n Save" sale, this reservation center had a hard time handling the high volume of reservations. Currently, staff members are so busy throughout the whole week that they are unable to take their breaks during their shifts.To uphold their high level of customer service, Southwest Airlines does not want a customer to be "on hold" for more than five minutes. However, Southwest wants to maintain a high level of operator utilization due to recent budget reductions. Under the current situation of two shifts with one staff member, customers are on hold for an average of two hours during both shifts. The operator utilization is over 99% making it virtually impossible for the staff members to get in their required 15-minute breaks.Quantitative Alternatives If Southwest Airlines were to continue scheduling one staff member during two shifts, they would be breaking all of their guidelines for customer service and employee relations. Customers calling during either shift would be "on hold" for more than two hours, if they stay on the line that long before hanging up and calling a competitor (Table 1). Also, staff members are required by law two fifteen-minute breaks per eight-hour shift. At a utilization rate of over 99.5%, there is no possible way for an operator to get in any break at all. Also, although the two staff members are working eight hours straight, they are not able to book enough reservations to fill the 880, 881, and 882 flights. The combination of unsold seats and "no-shows" would leave an average of thirteen empty seats per flight. This would result in approximately one thousand dollars of missed opportunity costs per flight per day (Table 1-A).The next alternative would be to have a staff member available 24 hours a day to accommodate additional customers with alternative schedules. This would create three eight-hour shifts from 8:00 a.m. to 4:00 p.m., 4:00 p.m. to midnight,...

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