Referencing Styles : Harvard
You are required to work in Pairs to answer the following; Please limit your answers to the categories listed below:-
Crowair Plc is a low cost airline operating short routes serving UK regional airports and other regional airports across Europe. They aim to keep costs low by offering a more basic level of service than established companies. This policy enables them to offer low air fares for their routes to their customers. Customers can pay for additional services such as increased baggage allowance, food and beverages.
Following a review of their operations Crowair Plc has identified a possibility of using one of their existing planes to offer a new route to their customers. They are considering offering one of the two options given below:
(i) An additional service between London and Edinburgh (both cities are in the UK), Crowair Plc already operates 1 flight per day on this route. Distance for the proposed route is 333 miles and flight time is one hour and fifteen minutes.
(ii) A new service between London and Paris (France), Crowair Plc does not offer any flights in or out of Paris at the moment. Distance for the proposed route is 212 miles and flight time is the same as for the London to Edinburgh route.
a) You have been invited to write a report evaluating each option. Outline how Planning, Decision making and Control could help with these decisions. Your discussion should identify fixed and variable costs and any other factors that you feel are relevant including any non-financial costs and benefits.
Note: The more relevant points covered the higher will be the marks awarded.
(Maximum 750 words) 45% of the marks
b) If Crowair Plc decides to fly between London and Paris they would like to be able to offer customers on the new route the opportunity to purchase sandwiches onboard the aircraft. A local bakery in Paris has offered to supply sandwiches to Crowair Plc. The sandwiches would be delivered freshly made to the aircraft for the return flight from Paris to London.
The bakery has calculated their costs and sales price for the sandwiches as follows:
£
Proposed Sandwich
Sales Price per sandwich 2.85
Cost of ingredients per sandwich 0.50
Cost of labour to prepare each sandwich 0.10
Delivery van hire cost per day to transport sandwiches to airport £110
Cold storage costs per day £25
Target Profit per day £36
Number of seats on aircraft 78
Using Cost-Volume- Profit analysis you have been invited to write a report offering advice to the bakery as to whether to supply sandwiches to Crowair Plc. Refer to the data above and illustrate your answer with diagrams and include any relevant calculations. Define any management accounting terms used. Consider any limitations to your analysis.
(Maximum 750 words) 45% of the marks
c) Turnitin submission, overall quality, originality, word count, appropriate written style, accurate referencing and presentation