among the bidlines and covers every scheduled flight.
The properties inherent in the crew scheduling dilemma require an expert system
design. The first part of the system uses manpower loading algorithms, the current
and previous month?s schedules (from various databases) and optimization
techniques in order to develop the set of trip pairings, which would adequately cover
all scheduled flights for the upcoming month within FAA and union work guidelines.
The trip pairing process is made even more onerous because American Airlines
operates several fleets of different aircraft and most pilots are trained to fly only one
type. The following diagram illustrates the requirements for a crew assignment
system.
Source: “Recent Advances in Crew -Pairing Optimization Techniques at American
Airlines”, Interfaces, Jan-Feb. 1991, V.21, p. 66.
The second part of the system takes trip pairings and bidlines and analyzes them
(subject to optimization techniques) in order to constantly search for a solution
(schedule) which yields the lowest cost for flight crews possible for a given flight
schedule. The system will continually runs through iterations of the optimization
routine and, if the set of bidlines it determines is more optimal than the last, replaces
the former with the latter. Naturally, the faster the iteration speed of the system,
mainframe or LAN, the sooner the system arrives at the optimal solution. The
following flow chart describes the subproblem iteration methodology.
Source: “Recent Advances in Crew -Pairing Optimization Techniques at American
Airlines”, Interfaces, Jan-Feb. 1991, V.21, p. 67.
American Airlines as well as 9 other airlines and a railroad, makes use of a system of
this design and it accounts for an annual cost savings of $20 million.
Scheduling for ramp workers, gate crews and ticket counter personnel is less
complex and also dependent on the flight schedule. Scheduling systems for these
personnel are less complex but also involve optimization techniques in order to
arrive at the lowest cost for labor while ensuring that arrival and departure times at
each gate are as close together as possible. Manpower loading algorithms are used
to assign more personnel to cover peak times and less personnel in each station for
off-peak hours during lulls in the hubs. Office personnel and repair crews usually
work regularly assigned hours, in the absence of strikes and/or emergencies, and are
quite simple to schedule. It should be noted that Human Resources and Payroll
Departments need to maintain a database containing each employee?s work record,
salary history and personal information in order to keep track of thousands of
employees.
The next factor of production for consideration is the equipment to be used in
production to meet forecasted demand. As mentioned above, American Airlines
operates two large fleets of aircraft, as well as several smaller fleets. The main aircraft
types are the McDonnell Douglas 80 and Boeing 727. The smaller fleets are
comprised of Douglas Corporation 10, British Aerospace 146, Boeing 737, Boeing
747, Boeing 757/767 and Airbus 300 aircraft. A particular flight or route might lend
itself to a particular type of aircraft which best matches characteristics of the flight. All
airlines have an extremely high capital/labor ratio which is indicative of the large
dollar expenditures made for aircraft. The airline industry is a mature, tactical
industry and, therefore, lends itself to a capital intensive posture yielding a high
capital/labor ratio. Fleet assignment problems lend themselves to integer linear
programming, which is a good way to arrive at a solution.
Unfortunately, the best aircraft for a certain flight may not be available because of
maintenance routing, flight schedule disruptions due to inclement weather or even
pilot strikes. Objectives that must be maximized include utilization of the most
efficient types of aircraft and determining the mix of aircraft to yield the lowest
operating costs. Other operational constraint parameters the system will be required
to deal with include the fact that certain flights will need to use certain aircraft types,
limits on number of aircraft remaining overnight at each station and the number of
slots available per airport per day. The decision model uses the linear programming
methodology and schedules two or more fleets to a flight schedule simultaneously in
order to ensure the availability of aircraft to meet demand. The flight schedule,
availability of aircraft (which aircraft to use on a particular flight) and gate availability,
as well as other parameters, are fed into the system. It must be ensured that each
flight and its following connection, known as a turn, are served by the same type of
aircraft. Equipment continuity is very important to the model?s integrity and a turn
cannot use two different types of aircraft. Each aircraft must be kept track of and
counted within the system so the model will know whether an aircraft is available. An
aircraft cannot be assigned to two different flights in different areas at the same
time. In addition, a provision or adjustment variable must be made to the model
when the station is not balanced. An unbalanced station occurs when there are more
arrivals than departures or there is an imbalance between the aircraft types used. By
using decision aids and technical utilities, the model will arrive at the optimal fleet
assignment through continuous iteration much the same as the crew bidline model
for flight crew scheduling described above.
The third factor of production which tactical managers must develop system
requirements for is in the area of finance. Aircraft and other related equipment
purchases are a large part of the capital budgeting requirement of an airline the size
of American Airlines. An issue which is central to the capital budgeting plan for
aircraft is the age-old decision, “Should we lease or buy our aircraft?” Leasing and
buying both have very real advantages and disadvantages over each other, and
therefore this type of decision tends to be objective based on whichever method will
achieve the least detriment to the bottom line. Accordingly, there are several very
well-developed methods employed by financial and accounting managers when
evaluating capital budgeting plans. These popular methods include net present
value, internal rate of return, payback period and accounting rate of return.
Whether or not to undertake capital budgeting is not an issue for a capital intensive
firm such as American Airlines. The key problem to be solved in capital budgeting
then becomes which analytical model is the best application for evaluation of various
scenarios such as which aircraft to buy, when to buy and whether to purchase them
or lease from the manufacturer. A capital budgeting system will has to be a technical
and/or analytical utility in the form of an expert system to assist tactical managers in
capital budgeting. One of the main inputs into a capital budgeting system is the
forecasted incremental cash flows per time period attributable to the prospective
project. Data for this requirement comes from historical revenue records for the
aircraft in question. A lease scenario and a buy scenario can be run for each
prospective capital budgeting plan in order to determine which project will most
increase the profits of the firm. Algorithms to perform the number crunching can be
programmed into the system without much trouble since these are well developed
models. Again, the main purpose of capital budgeting is to act as a decision aid to
indicate which analytical methods/models will prove to be the most evaluators of a
project?s viability. After evaluating the project, the system should aid management in
where and how to obtain the needed funds to proceed with an acceptable capital
project.
The final factor of production and its attendant information facility requirements to
receive consideration in the report before discussing production is the material
aspect of the firm. For an airline, materials for production can include, but are not
limited to, items used in delivery of services such as aircraft parts, beverages served
on flights, in-flight meals, office supplies and many, many more. The main objective
is to effectively determine the correct amount of supplies and where to purchase
them at the lowest cost. Another goal is to minimize materials carrying and handling
costs through a quick response system between airline and suppliers akin to the type
endorsed in The Virtual Corporation. Inventories of aircraft repair an