Train new flight attendants flight attendants are needed to maintain in flight service. Attendants have high propensity to leave. On average they stray for 2 years and then leave. Training course for new attendants takes 6 weeks. After completing training, attendants take one week vacation. They then enter a pool to fill for leaving attendants as needed. They will be paid $500 per month while are training, vacationing, and waiting in the pool. The cost of training contains salaries for instructors and support personnel of $190+$60 = $250 per instructor and support per trainee per week. A training team contains 10 instructor and 10 support personnel. They are paid only for the training period. Pay is independent of both the class size and the number of classes running simultaneously. How do you plan this process to minimize costs?

Flow unit = one flight attendant (FA). Input (un-trained FA)  Training Process  Output (quitted FA). Tradeoff between fixed and variable costs in a service industry. The airline requires a staff of about 1000  I = 1000 Average job tenure being about 2 years  T = 2 yrs I = RT  R = 500 /yr We pay the trainees $500 per month. That is $6000 per year or 6000/50 = $120 per week. Training $250 per Instructor and Assistant. Ten pair of Instructor and Assistant for 5 weeks; 6(190+60)*10 = $15000

What will happen if we train all the 500 attendants 7 weeks before the year starts. Instruction cost = 250*10 *6 = Attendance salary while waiting for assignment 6000(500/2) = 1,500,000 Total = 15,000+1,500,000 = 1,515,000 Payment for training and vacation for all = 840 (500) = $420,000 What will happen if we train all the 70 attendants 7 weeks before the year starts. And then 70 more. Each time 10 Instruction cost = (250*10 *6)( 500/70) = 107,143 Attendance salary while waiting for assignment 6000(70/2) = 210,000 Total = 107, ,000= 317,143 Payment for training and vacation for all = 840*70*500/70 = 840*500 = 420,000

EOQ == 50 units. # of classes = R/Q = 500/50 = 10 Cycle inventory = 50/2 = 25 The annual cost will be S(R/Q) + H(Q/2) + RC 15000(10)+6000(25)+500(840) = 300, = 720,000 Inventory cycle = 50/10 = 5 weeks. 6 weeks to produce. 5 weeks to consume

View II Training and vacation is ordering cost Therefore, ordering cost has two parts; Fixed and Variable Fixed Ordering cost = S =15000 Variable ordering cost is 6+1 weeks pay  (6000/50)7 C = 840 St = S+CQ His annual cost will be S(R/Q) + H(Q/2) (S+CQ)(R/Q) + H(Q/2) S(R/Q) + CR + H(Q/2) = 720,000 Inventory cycle = 50/10 = 5 weeks. 6 weeks to produce. 5 weeks to consume

Q = 50

Q = 60