Abstract

The purpose of this case is to teach skills in analytical modeling of strategic decisions based on real life data. Strategic decisions such as utilization, allocation of capacity, and pricing made by airlines in India in recent years provide the context. The relevance and application of the ‘newsvendor’ model as a tool for analyzing these strategic decisions is illustrated. This case is suitable for use in management science/quantitative methods/business analytics or operations management classes for graduate or senior undergraduate students. An important feature of the case is that modeling is being applied to the analysis of strategic decisions. Therefore, it can also be used in a business strategy class to illustrate how these applications can lead to useful insights on strategy.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Modeling Strategic decisions
• Capacity Utilization
• Capacity allocation
• Pricing
• Quantitative methods

Keywords

Operations, Management Science, Quantitative Methods, Operational Strategies, Business Analytics, Capacity utilization, Capacity allocation, Pricing, ‘Newsvendor’ model, Sensitivity analysis.