Fbo Case Essay
a) Refueling of Commercial (40%) under contract & Retail (60%)
b) Provision of a variety of services (refueling, maintenance, and Avionics) to private and corporate aircraft.
Reiling, the General Managers is concerned that the commercial contract operations are not being performed as efficiently as possible and is considering a variety of alternatives to alter operating procedures and operations control. At the same time, if pooling is deemed inappropriate then the implementation of a different format in the face of a hostile management/union relationship is a concern.
This …show more content…
Refuelers (23 x $13.00 per hour x 40 hrs/wk x
52 wks. X 1.25 (fringe benefits)) 777,400
Overtime (14% of labor) 136,136
Total Labor Cost 1,108,536
Equipment (lease cost)
Trucks (11 x $2400/mo x 12 mos) 316,800
Operating & Maintenance Cost (11 x 10,000) 110,000
Total operations cost 1,535,336
Gross Profits 1,024,664
Utilization of Labor:
As per case 5 leads, 23 refuelers are available to perform task. In a given day 8.5 hrs per person. Assume ½ hr lunch, 2 10 mins break and a 10 mins cleanup, net of 7.5 work hrs per person per day.
= 23 person x 7.5 hrs per day x 5 days per week = 862.5 hrs per week and hence 51,750 minutes
Overtime payments -> 14% of regular wages. 1.5 times the regular