ASSIGNMENT - 2

Name – Nidhi Singh

Session – (2024 – 2025)

Submitted to:
Mr. Vikram Sharma,
Asst. Professor, IMS GZB
Ans 1(a)-
Southwest Airlines has developed a unique operations strategy that has played a significant role in its
success as a profitable airline. The key elements of Southwest Airlines' operations strategy and how
they contribute to its profitability are as follows:
1. Low-Cost Model: Southwest Airlines' operations strategy is centred around a low-cost model. By
operating a single type of aircraft (Boeing 737) and offering only coach seating, Southwest can
achieve economies of scale, reduce maintenance and training costs, and simplify its operations.
This focus on cost efficiency allows Southwest to keep its operating expenses low and offer
competitive fares to customers. By minimizing unnecessary expenses and optimizing
operational processes, Southwest can maintain a cost advantage over its competitors.
2. Point-to-Point Service: Southwest Airlines differentiates itself by providing a point-to-point
service model. Unlike traditional hub-and-spoke airlines, Southwest operates direct flights
between cities, eliminating the need for connecting flights and reducing layover times. This
approach improves operational efficiency, enhances customer convenience, and allows
Southwest to maximize aircraft utilization. By offering direct flights and simplifying its route
network, Southwest can reduce operational complexities and costs, ultimately contributing to its
profitability.
3. Employee Engagement: Southwest Airlines places a strong emphasis on employee engagement
and empowerment. The company's organizational structure, described as an upside-down
pyramid, prioritizes frontline employees and encourages a collaborative decision-making
process. By valuing and empowering its employees, Southwest fosters a culture of innovation,
accountability, and customer service excellence. Engaged employees are more motivated,
committed, and aligned with the company's goals, leading to improved operational performance
and customer satisfaction. This employee-centric approach helps Southwest maintain high
levels of service quality and operational efficiency.
4. Customer Focus: Southwest Airlines is known for its customer-centric approach to service.
While the airline may not offer luxury amenities or premium services, it focuses on delivering a
reliable, no-frills travel experience at affordable prices. By understanding and meeting the needs
of price-sensitive travellers who prioritize cost and convenience, Southwest has built a loyal
customer base. By providing consistent and efficient service, Southwest can attract and retain
customers who value affordability, reliability, and simplicity in air travel. This customer-focused
strategy has been instrumental in Southwest's success as a profitable airline.
5. Continuous Innovation: Southwest Airlines is committed to continuous innovation and
improvement in its operations. The airline leverages technology, data analytics, and customer
feedback to enhance its services, optimize processes, and stay ahead of industry trends. By
investing in new initiatives and operational efficiencies, Southwest can adapt to changing
market conditions, improve customer experiences, and drive long-term profitability. This focus
on innovation and agility allows Southwest to remain competitive and responsive to evolving
customer needs and market dynamics.
Ans 1(b)-
Southwest Airlines has implemented several cost-saving and innovative models in its operations to offer
low-cost airline services. Some of the key strategies and measures taken by Southwest Airlines include:
1. Single Aircraft Type: Southwest Airlines operates a fleet consisting entirely of Boeing 737
aircraft. By standardizing its fleet with a single aircraft type, Southwest reduces maintenance
and training costs. This simplification allows the airline to streamline operations, optimize
scheduling, and achieve economies of scale in maintenance, parts inventory, and pilot training.
The use of a single aircraft type also enables Southwest to negotiate better deals with suppliers
and reduce overall operating expenses.
2. Point-to-Point Routes: Southwest Airlines follows a point-to-point route network model, as
opposed to the traditional hub-and-spoke system used by many other airlines. By operating
direct flights between cities, Southwest minimizes layover times, reduces operational
complexities, and improves aircraft utilization. This approach helps Southwest lower operating
costs, enhance operational efficiency, and offer more convenient and direct flight options to
customers. The point-to-point model allows Southwest to optimize its route network and
maximize efficiency in its operations.
3. No Frills Service: Southwest Airlines is known for its no-frills service model, which focuses on
providing essential services without unnecessary amenities. By eliminating in-flight meals,
assigned seating, and other luxury features, Southwest reduces catering costs, turnaround
times, and aircraft weight. This streamlined approach helps Southwest keep ticket prices low
and operating costs in check. The airline's emphasis on simplicity and efficiency allows it to
offer affordable fares to customers while maintaining profitability.
4. Lean Operations: Southwest Airlines emphasizes lean operations and efficient processes
throughout its business. The airline continuously looks for ways to streamline operations,
eliminate waste, and improve productivity. By optimizing ground operations, baggage handling,
and boarding procedures, Southwest reduces turnaround times, increases aircraft utilization,
and enhances overall operational efficiency. These lean practices help Southwest minimize
costs, improve service quality, and deliver value to customers.
5. High Employee Productivity: Southwest Airlines prioritizes employee productivity and
engagement as a key driver of cost savings. The airline's employee-friendly culture, profit-
sharing programs, and emphasis on teamwork motivate staff members to work efficiently and
collaboratively. By empowering employees to contribute ideas, solve problems, and take
ownership of their roles, Southwest fosters a culture of innovation and continuous
improvement. High levels of employee productivity enable Southwest to operate with fewer staff,
reduce labour costs, and enhance overall operational performance.
6. Direct Sales and Distribution: Southwest Airlines has a strong focus on direct sales and
distribution channels, bypassing traditional travel agents and their associated fees. By
leveraging online booking platforms, direct communication with customers, and targeted
marketing strategies, Southwest reduces distribution costs and increases revenue. The airline's
direct sales approach allows it to control pricing, optimize seat inventory, and build customer
loyalty. By cutting out intermediaries and focusing on direct customer relationships, Southwest
can offer competitive fares and maximize profitability.
Ans 2-

Weights:
1. Availability of component suppliers: 80
2. Availability of labour: 60
3. Availability of land: 90
4. Government policies and tax benefits: 50
5. Quality of basic and social infrastructure: 70
Calculating the total scores for each site:
Site 1: Total Score = (50 * 0.8) + (70 * 0.6) + (60 * 0.9) + (90 * 0.5) + (80 * 0.7) Total Score = 40 + 42 + 54 + 45
+ 56 Total Score = 237
Site 2: Total Score = (80 * 0.8) + (60 * 0.6) + (70 * 0.9) + (65 * 0.5) + (50 * 0.7) Total Score = 64 + 36 + 63 +
32.5 + 35 Total Score = 230.5
Site 3: Total Score = (90 * 0.8) + (70 * 0.6) + (50 * 0.9) + (70 * 0.5) + (60 * 0.7) Total Score = 72 + 42 + 45 + 35
+ 42 Total Score = 236
Based on the calculations using the weights, Site 1 has the highest total score of 237, followed by Site 3
with a score of 236, and Site 2 with a score of 230.5. Therefore, according to the factor rating method
with the provided scores and weights, Site 1 would be the most appropriate location for setting up the
new plant.
Ans 3-

Costs:
• Raipur:
o Transport: Rs. 46
o Labour: Rs. 1450
o Economic: 4
o Ecological: 3
• Peelibheet:
o Transport: Rs. 28
o Labour: Rs. 1250
o Economic: 5
o Ecological: 4
Weightage:
• Transport: 2
• Labour: 1
• Economic: 1
• Ecological: 2
Calculating the total score for each location:
Raipur: Total Score = (46 * 2) + (1450 * 1) + (4 * 1) + (3 * 2) Total Score = 92 + 1450 + 4 + 6 Total Score =
1552
Peelibheet: Total Score = (28 * 2) + (1250 * 1) + (5 * 1) + (4 * 2) Total Score = 56 + 1250 + 5 + 8 Total Score
= 1319
Therefore, based on the analysis, Raipur has a total score of 1552, while Peelibheet has a total score of
1319. Raipur would be the preferred location for setting up the new plant according to this analysis.

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