CASE STUDY
ALABAMA AIRLINE’S CALL CENTER
Alabama Airlines opened its doors in December 2001 as a commuter service with its
headquarters and hub located in Birmingham. The airline was started and managed by two
former pilots, David Douglas and George Devenney. It acquired a fleet of 12 used prop-jet
planes and the airport gates vacated by Delta Air Line’s 2001 downsizing due to September 11
terrorist attacks.
Table 1. Incoming Call Distribution
Time Between Calls (minutes) Probability
1 .11
2 .21
3 .22
4 .20
5 .16
6 .10
With business growing quickly, Douglas turned his attention to Alabama Air’s “800”
reservations system. Between midnight and 6:00 A. M., only one telephone reservations agent
had been on duty. The time between incoming calls during this period is distributed as shown in
Table 1. Carefully observing and timing the agent, Douglas estimated that the time required to
process passenger inquiries is distributed as shown in Table 2.
Table 2. Service-Time Distribution
Time to Process Customer Inquiries (minutes) Probability
1 .20
2 .19
3 .18
4 .17
5 .13
6 .10
7 .03
All customers calling Alabama Air go “on hold” and are served in the order of the calls received
unless the reservations agent is available for immediate service. Douglas is deciding whether a
second agent should be on duty to cope with customer demand. To maintain customer
satisfaction, Alabama Air wants a customer to be “on hold” for no more than 3 to 4 minutes; it
also wants to maintain a “high” operator utilization.
Furthermore, the airline is planning a new TV advertising campaign. As a result, it expects an
increase in “800” line phone inquiries. Based on similar campaigns in the past, the incoming call
distribution from midnight to 6:00 A. M. is expected to be as shown in Table 3. (The same service-time distribution will apply.)

Table 3. Incoming Call Distribution
Time Between Calls (minutes) Probability
1 .22
2 .25
3 .19
4 .15
5 .12
6 .07

Discussion Questions
1. Given the original call distribution, what would you advise Alabama Air to do for the
current reservation system? Create a simulation model to investigate the scenario.
Describe the model carefully and justify the duration of the simulation, assumptions, and
measures of performance.
2. What are your recommendations regarding operator utilization and customer satisfaction
if the airline proceeds with the advertising campaign?

Discussion Questions
1. Given the original call distribution, what would you advise Alabama Air to do for the
current reservation system? Create a simulation model to investigate the scenario.
Describe the model carefully and justify the duration of the simulation, assumptions, and
measures of performance.
2. What are your recommendations regarding operator utilization and customer satisfaction
if the airline proceeds with the advertising campaign?

1. You take a sample of 4 people’s scores on a personality test. Their scores are 13, 16, 12, and 18. You don’t know the population mean or standard deviation. The mean of these scores is 14.75.

1. Use the corrected standard deviation formula to find the population standard deviation. Round to 2 decimal places. (Hint: Draw the chart)

2. Use the population standard deviation from (a) to find the standard error for these for sample. Round to 2 decimal places.

The accompanying data file contains 20 observations for t and y_t.

b-1. Estimate a linear trend model and a quadratic trend model. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

b-2. Which trend model describes the data well?

• Linear trend based on the R² measure.

• Linear trend based on the adjusted R² measure.

• Quadratic trend based on the R² measure.

• Quadratic trend based on the adjusted R-squared and P-value for the quadratic term

Explain the different hypothesis tests one could use when assessing the distribution of a categorical variable (e.g. smoking status) with only two levels (e.g. levels: smoker and non-smoker) vs. more than two levels (e.g. levels: heavy smoker, moderate smoker, occasional smoker, non-smoker).

Be precise. Use the language of the textbook to identify the appropriate test and how you would conduct it. NOTE: Minimum of 150 words for primary post and 50 words for each of three replies to your peers.

One state lottery game has contestants select 5 different numbers from 1 to 45. The prize if all numbers are matched is 2 million dollars.   The tickets are $2 each.

1)    How many different ticket possibilities are there?

2)

One state lottery game has contestants select 5 different numbers from 1 to 45. The prize if all numbers are matched is 2 million dollars.   The tickets are $2 each.

1)    How many different ticket possibilities are there?

2)    If a person purchases one ticket, what is the probability of winning? What is the probability of losing?

3)    Occasionally, you will hear of a group of people going in together to purchase a large amount of tickets. Suppose a group of 30 purchases 6,000 tickets.

a)    How much would each person have to contribute?

b)    What is the probability of the group winning? Losing?

   If a person purchases one ticket, what is the probability of winning? What is the probability of losing?

3)    Occasionally, you will hear of a group of people going in together to purchase a large amount of tickets. Suppose a group of 30 purchases 6,000 tickets.

a)    How much would each person have to contribute?

b)    What is the probability of the group winning? Losing?

please show all work:

A machine that fills beverage cans is supposed to put 12 ounces of beverage in each can. The standard deviation of the amount in each can is 0.12 ounce. The machine is overhauled with new components, and ten cans are filled to determine whether the standard deviation has changed. Assume the fill amounts to be a random sample from a normal population. 12.14, 12.05, 12.27, 11.89, 12.06, 12.14, 12.05, 12.38, 11.92, 12.14

Perform a hypothesis test to determine whether the standard deviation differs from 0.12 ounce. Use the α = 0.05 level of significance. Evaluate these machines using a Traditional Hypothesis Test.

Hypothesis with claim:

Draw the curve, labeling the CV, TV, and shading the critical region.

CV(s):

TV:

Decision:

Work standards specify time, cost, and efficiency norms for the performance of work tasks. They are typically used to monitor job performance. In one distribution center, data were collected to develop work standards for the time to assemble or fill customer orders. The table below contains data for a random sample of 9 orders.

1. Construct a simple linear regression of the data using SPSS. What is the equation of the least squares line? Use time as the dependent variable.
2. In general, we would expect the mean time to fill an order to increase with the size of the order. Do the data support this theory? Test using α = .05.

5. You’re competing in the rock paper scissors international tournament. Use the following information to determine whether your semifinal opponent over-represents certain choices (?=0.05). Show all relevant values behind your decision.

6. 	Frequency
   Rock	85
   Paper	110
   Scissors	105
   Total	300

A population of values has a normal distribution with μ=62.7μ=62.7 and σ=66.2σ=66.2. You intend to draw a random sample of size n=42n=42.

Find the probability that a single randomly selected value is greater than 49.4.
P(X > 49.4) =

Find the probability that a sample of size n=42n=42 is randomly selected with a mean greater than 49.4.
P(M > 49.4) =

Enter your answers as numbers accurate to 4 decimal places. Answers obtained using exact z-scores or z-scores rounded to 3 decimal places are accepted.

License

Consider the experiment of rolling a six-sided fair die. Let X

denote the number of rolls it takes to obtain the first 5,

Y denote the number of rolls until the first 2, and Z denote

the number of rolls until the first 4. Numerical answers are needed only for parts (a) and

(b). Expressions are sufficient for parts (c), (d), and (e).

a) E[X|Y = 1 or Z = 1]

b) E[X|Y = 1 and Z = 2]

c) E[X|Y = 1 and Z = 3]

d) E[X|Y = 3 and Z = 4]

e) E[X^2 |Y = 3 and Z = 4]

Question 1 [35 marks]

The purchasing manager has formulated the following LP model:

Minimise COST = 6M1 + 5M2 + 4M3 + 7M4

subject to

0,05M1 + 0,04M2 + 0,08M4 ≥ 50 (CHRM)

0,40M1 + 0,80M2 + 0,60M3 + 0,32M4 ≤ 500 (IRON)

M1 + M2 + M3 + M4 = 1000 (MASS)

and all variables ≥ 0,

where Mi = number of kg of scrap type i purchased, i=1,2,3,4.

(a) Solve this model using LINDO or SOLVER.

(b) Write down the foundry's optimal purchasing plan and cost.

Based on your LINDO or SOLVER solution answer the following questions by using only the initial printout of the optimal solution. (This means that you may not change the relevant parameters in the model and do reruns.)

(c) How good a deal would the purchasing manager need to get on scrap type 1 before he would be willing to buy it for this order?

(d) Upon further investigation, the purchasing manager finds that scrap type 2 is now being sold at R5,40 per kg. Will the purchasing plan change? By how much will the cost of purchasing the metals increase?

(e) The customer is willing to raise the ceiling on the iron content in order to negotiate a reduction in the price he pays for the order. How should the purchasing manager react to this?

(f) The customer now specifies that the alloy must contain at least 6% chromium. Can the purchasing manager comply with this new specification? Will the price charged for the order change?

The mean of a population is 74 and the standard deviation is 16. The shape of the population is unknown. Determine the probability of each of the following occurring from this population.

a. A random sample of size 32 yielding a sample mean of 76 or more

b. A random sample of size 130 yielding a sample mean of between 72 and 76

c. A random sample of size 220 yielding a sample mean of less than 74.3

A population of values has a normal distribution with μ=81.3μ=81.3 and σ=88.7σ=88.7. You intend to draw a random sample of size n=168n=168.

Find P₈₀, which is the score separating the bottom 80% scores from the top 20% scores.
P₈₀ (for single values) =

Find P₈₀, which is the mean separating the bottom 80% means from the top 20% means.
P₈₀ (for sample means) =

Enter your answers as numbers accurate to 1 decimal place.
************NOTE************ round your answer to ONE digit after the decimal point! ***********
Answers obtained using exact z-scores or z-scores rounded to 3 decimal places are accepted.

• 10.7 When people make estimates, they are influenced by anchors to their estimates. A study was conducted in which students were asked to estimate the number of calories in a cheeseburger. One group was asked to do this after thinking about a calorie-laden cheesecake. A second group was asked to do this after thinking about an organic fruit salad. The mean number of calories estimated in a cheeseburger was 780 for the group that thought about the cheesecake and 1,041 for the group that thought about the organic fruit salad. (Data extracted from “Drilling Down, Sizing Up a Cheeseburger's Caloric Heft,” The New York Times, October 4, 2010, p. B2.) Suppose that the study was based on a sample of 20 people who thought about the cheesecake first and 20 people who thought about the organic fruit salad first, and the standard deviation of the number of calories in the cheeseburger was 128 for the people who thought about the cheesecake first and 140 for the people who thought about the organic fruit salad first.

• a. State the null and alternative hypotheses if you want to determine whether the mean estimated number of calories in the cheeseburger is lower for the people who thought about the cheesecake first than for the people who thought about the organic fruit salad first.

• b. In the context of this study, what is the meaning of the Type I error?

• c. In the context of this study, what is the meaning of the Type II error?

• d. At the 0.01 level of significance, is there evidence that the mean estimated number of calories in the cheeseburger is lower for the people who thought about the cheesecake first than for the people who thought about the organic fruit salad first?