MGMT 651 – Analytics for Managerial Decision-Making
MGMT 651 – Analytics for Managerial Decision Making
Homework 2 – Part 1
Worth 85 points
Complete each question within a single Word document.
For problems involving POM-QM, be sure to include screen captures for your input and output and provide an interpretation of your results.
NOTE: Define variables carefully as and when needed.
PART 1
1. (10 points) Chapter 1 Problem 12
2. (10 points) Chapter 1 Problem 14
3. (10 points) Burger Prince is considering opening a new restaurant in Colton, Loma Linda, or, Upland. The following fixed and variable cost data have been assembled.
Variable Costs per custome
Location
Fixed Cost per yea
Material
Labo
Overhead
Colton
$200,000
$0.20
$0.40
$0.40
Loma Linda
$180,000
$0.25
$0.75
$0.75
Upland
$170,000
$1.00
$1.00
$1.00
Over what range of annual demand is each facility going to have a competitive advantage?
4. (15 points) Chapter 2 Problem 13. First read Section 2.2 of textbook, then attempt this questions. You can search in Google for free graph papers. You can draw the graph on a graph-paper by hand, then take a photo, and insert the image to your homework document.
5. (20 points) Chapter 2 Problem 39. Save your solutions because you may need them for HW #3.
6. (20 points) Chapter 2 Problem 41.
PART 2
This question relates to the journal article: Reducing flight delays through better traffic management. The complete reference is as follows:
Article title: Reducing Flight Delays Through Better Traffic Management
Authors: Sud et al.
Journal Name: Interfaces
Volume: 39 Issue: 1 Year: Jan/Feb 2009 Pages: 35-45
The article has been attached above. Read the article and based on your understanding, write a one-page (12 font size, single line spacing) extended abstract that (a) describes the problem, (b) solution methodology developed, and (c) summarizes the benefits.
1
Submit your homework as one single attachment. Include POM-QM input and output screenshots wherever applicable. If you submit your homework as an MS-Excel document, make sure that it is properly formatted to 8.5x11 page size!!
1 of 1
Journal Article.pdf
Vol. 39, No. 1, January–Fe
uary 2009, pp. 35–45
issn XXXXXXXXXX �eissn 1526-551X �09 �3901 �0035
informs ®
doi XXXXXXXXXX/inte XXXXXXXXXX
© 2009 INFORMS
THE FRANZ EDELMAN AWARD
Achievement in Operations Research
Reducing Flight Delays Through
Better Traffic Management
Ved P. Sud, Midori Tanino, James Wetherly
Federal Aviation Administration, Washington, DC 20591
{ XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX}
Michael Brennan, Miro Lehky
Metron Aviation, Sterling, Virginia 20166 {
XXXXXXXXXX, XXXXXXXXXX}
Ken Howard, Rick Oiesen
Volpe Center, Cam
idge, Massachusetts 02142 { XXXXXXXXXX, XXXXXXXXXX}
As air traffic in the United States has grown over the last several years, traffic demand has begun to outstrip
capacity. As of 2005, the Federal Aviation Administration (FAA) had no effective approach for strategically man-
aging a weather event that has been very disruptive to the national aviation system—large-scale thunderstorms
that block the major flight routes in the northeastern United States. The operations research team that supports
the FAA’s efforts to provide innovations in air traffic management, led by researchers at Metron Aviation, Inc.
and the Volpe Transportation Center, recognized the consequence of this operational deficiency and set out to
esolve it. In this paper, we show how this team
(1) developed and applied system-simulation models to quantify the extent of the traffic flow management
problem and convey its magnitude to the FAA and to the aviation industry;
(2) designed the Airspace Flow Program (AFP), a new approach to managing air traffic that could co
ect
the problem within the limitations of a short development cycle and a change-resistant culture;
(3) designed and developed an interactive simulation system that could be and was used to refine and perfect
this concept prior to deployment by developing policies on the use of a decision support system;
(4) engaged FAA and airline traffic management experts in a series of interactive exercises using the simu-
lation system to develop the final software design, operational procedures, and decision rules for deployment
and use; and
(5) provided a clear and convincing postdeployment benefits assessment for the new traffic management
approach.
The deployment of this new capability was an enormous success that both the FAA and the airline community
heralded widely. The postdeployment impact assessment showed benefits to the aircraft operators and the flying
public of almost $190 million in 2006 and 2007, the first two years of use, compared to less than $5 million in
design and development costs. Broader usage of AFPs and new applications for them show a projected 10-yea
enefit of approximately $2.8 billion.
Key words : simulations: applications; transportation: models, assignment, scheduling, vehicle routing.
Amajor responsibility of the Federal AviationAdministration (FAA) is to provide air traffic
management services for the national airspace. Ai
traffic management fills the real-time role of ensur-
ing that airplanes and passengers travel safely and
efficiently from the departure airport, through the
airspace, to their destination.
Air traffic management has two inte
elated func-
tions: (1) air traffic control and (2) traffic flow manage-
ment (TFM). The better-known function is air traffic
35
Sud et al.: Reducing Flight Delays Through Better Traffic Management
36 Interfaces 39(1), pp. 35–45, © 2009 INFORMS
control, a role that the familiar air traffic controlle
fills largely by using a radar scope and a headset to
manage aircraft within a defined volume of airspace.
Each controller is responsible for keeping each flight
in his or her volume safely separated from every othe
flight.
TFM’s role, and the subject of this article, is to
keep the amount of traffic each controller must direct
to a manageable level by anticipating future traffic
demand and strategically controlling aggregate flows
of flights to keep the demand within tolerable bounds.
To support its TFM function, the FAA has developed
the Enhanced Traffic Management System (ETMS),
a software and communications system that collects
and integrates real-time data from FAA and airline
sources to identify future demand and capacity imbal-
ances at airports and in the airspace. ETMS includes
decision-support tools that help FAA traffic man-
agers prevent these imbalances by issuing structured
directives known as traffic management initiatives.
These actions redistribute traffic demand over time
and space by delaying and rerouting flows of traffic.
Metron Aviation, Inc. and the Volpe Transportation
Center support the FAA’s System Operations Services
Programs Office by helping to sustain and improve
existing ETMS software, and by designing, develop-
ing, and deploying new concepts and approaches fo
the next generation of TFM. The operations research
(OR) practitioners at Metron Aviation and Volpe, the
“TFM OR team,” work with the FAA and the airlines
to identify TFM operational problems and to solve
them by developing new concepts and approaches.
In this paper, we will describe how this team used
the principles and practices of OR to design and help
deploy a new type of traffic management initiative,
and thus identified and solved a major TFM problem
in the national airspace.
This new type of traffic management initiative, the
Airspace Flow Program (AFP), is a powerful TFM
capability that was introduced in June 2006 with
extensive public exposure from the most senior execu-
tives in both the FAA and the aviation industry (Levin
2006). The innovation is projected to save aircraft
operators $1 billion to $3 billion in operating costs
y reducing delays and cancellations over the next
decade, and is projected to reduce passenger delays
y more than a million hours each year.
Identifying and Illustrating the Key
TFM Problem
Traffic-Flow Management Before Airspace
Flow Programs
As of 2004, the FAA had developed and deployed
effective ETMS-based solutions for two key TFM prob-
lems (1) controlling high-a
ival demand at airports
with limited capacity and (2) managing moderate-
scale thunderstorm systems.
To monitor and control high-a
ival demand at
airports, traffic managers use the Flight Schedule
Monitor (FSM), an ETMS decision support tool first
deployed in 1998. When the FSM projects a future
demand or capacity imbalance at any major US o
Canadian airport, managers can use algorithms in
the tool to compute and assign a delayed departure
time for each flight; this traffic management initiative,
known as the Ground Delay Program (GDP), extends
the a
ival demand safely and fairly. ETMS commu-
nicates the assigned departure times, which the FSM
has computed, to the airlines for planning and to air-
port control towers for enforcement.
To manage moderate-scale convective weathe
(thunderstorms) in the en route portion of a flight’s
path, the FAA developed the ETMS-based Flow Con-
strained Area (FCA) tool (Figure 1), which was
intended to be used for rerouting traffic. Using this
tool, traffic managers can geographically define con-
gested areas in the airspace, such as a region of thun-
derstorm activity. ETMS will then produce a list of
(2) ETMS generates lists
of flights in the FCAs.
(3) Airlines route flights on
the lists around FCAs.
(1) FAA creates FCAs over small-scale weather systems.
Figure 1: The FAA uses FCAs to manage traffic during small-scale en route
weather events.
Sud et al.: Reducing Flight Delays Through Better Traffic Management
Interfaces 39(1), pp. 35–45, © 2009 INFORMS 37
flights expected to traverse each area. Traffic man-
agers use these lists to decide which flights must be
outed around the weather and congestion.
As of 2004, the FAA had no effective approach fo
managing one key TFM problem: wide-scale convec-
tive weather fronts, i.e., extended lines of thunder-
storms blocking major flight routes. These weathe
systems typically occur during the busy summe
travel season and cause severe problems when they
occur over the heavily traveled Northeast. This traffic
management problem regularly resulted in enormous,
system-wide disruptions, leading to billions of dollars
annually in increased operating costs and revenue loss
to the airlines and to general aviation operators, and
inconvenience to the flying public.
Such severe weather systems substantially reduce
en route capacity and are too large for much of the
traffic to fly around. In the early 2000s, to reduce
the traffic flow through these systems, the FAA
egan to employ a traffic management approach that
could be implemented using the then-available ETMS
tools. The FAA recognized that holding flights on
the ground had to be part of reducing demand. It
had only one tool that could impose ground delay,
namely, airport GDPs. Therefore, it began to issue
GDPs to manage en route problems. Although they
were designed as an airport tool, GDPs were drafted
into use for en route severe weather under the theory