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Essay / Research Paper Abstract
A 5 page paper discussing how Southwest Airlines applied the concepts of activity-based costing to its cargo business, with the result that it was able to reduce cargo-related expenses by 70 percent. Bibliography lists 4 sources.
Page Count:
5 pages (~225 words per page)
File: CC6_KSacctABCswa.rtf
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Unformatted sample text from the term paper:
bastion of efficiency, service and consistent profitability in an industry where most of the leaders that still exist have been in or close to bankruptcy, Southwest Airlines is known for
taking unconventional approaches to any aspect of operation that can make it more efficient. Such was the case with its cargo business several years ago. It was quite
efficient in moving people from place to place, but its cargo business was far less effective. "ManifesT Destiny" An article by Fred Seibel
and Chuck Thomas, "ManifesT Destiny" describes the situation that Southwest faced and its dilemmas in arriving at a better process. The cargo business is one that has the ability
to enhance an airlines profitability in that it gains additional revenue for an activity that it would have been doing (i.e., flying a specific plane) anyway. Space on an
airplane, whether in the form of an unsold passenger seat or unfilled cargo space, is among the most perishable of products. Once the plane leaves the ground neither is
useful to the company any longer. Fred Seibel is a vice president of a software company that Southwest secured to help it find
a solution; Chuck Thomas is Southwests director of financial analysis. They found that there was no system to use to book cargo. One result was that a flight
could come to takeoff time with 10,000 pounds scheduled in cargo when it had space only for 2,000 pounds. Another was that passengers often were delayed because of cargo
transfer issues on the ground. Still another was that baggage handlers were expending a great deal of effort to move cargo from one plane to another. A final
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