YATCH CONSULTING COMPANY PROPOSAL FOR SERVICES
Great news! Management of your consulting firm agrees with your proposal and has given your group the green-light to respond to the RFP. Even better news, ExpressJet has selected your firm for the engagement.
ExpressJet has been on a downward turn in profit over the past several years due to aging planes. The current fleet is not fuel efficient and the cost of repairs are steadily increasing over time. The major carriers such as American, United, etc. are moving their business to other companies that can provide the same service for cheaper with more up-to-date airplanes.
In order for ExpressJet to compete, it needs to acquire new airplanes. Part of your team has completed a Sales Budget looking forward into the next quarter as a benchmark for future quarters. With that information, you need to help ExpressJet decide under which of the following capital acquisition scenarios would benefit the company most.
Complete the analysis of the Sales Budget your team has created. Based on the projected revenue numbers within the quarterly data given, determine approximately how many new airplanes will be needed to generate the necessary revenue on an annualized basis. The industry uses Passenger Seat Miles as a measure of revenue. Current data from the industry shows revenue per Passenger Seat Mile is 16 cents. ExpressJet believes that their revenue will go up by one cent per month during the quarter. An average plane flies 52,500,000 miles a year and will last 30 years. Complete a 2 to 3 page memo to the management of ExpressJet explaining your analysis of their asset needs. The memo is due at the end of Week 4.
Attachment:- Assignment.rar