EU Holidays

Description

The profit margin for the travel agency industry in Singapore, which mostly offered travel packages to Asia and Europe, was very thin. An up-and-coming travel agency faced the dilemma of offering maximum customer satisfaction while keeping its operating cost (e.g., fees for its tour guides) low. Rather than simply assigning travel guides to tours by trial and error, a director of the travel agency decided to use an optimization template. This case requires the development of an optimization template to advise management on the optimal assignment of tour leaders (within constraints of their availability and required rest periods) and generate maximum satisfaction among the customers. Considerations for tour-guide assignment include tour guides’ customer satisfaction levels, expertise on particular tours, visas for specific countries, and employment plans.

Learning Objective

This case challenges students to assign leaders to tours while taking into account their availability and rest periods. The main challenge is to figure out incompatible blocks of dates (i.e., blocks within which leaders can lead at most one tour). Further, the case invites students to perform sensitivity analyses, which will make obvious to students that while paying more for better tour leaders and increased customer satisfaction, there is decreasing economic return. Thus, students will have to recommend a “sweet spot” for the optimal fees to pay leaders and the near-maximum customer satisfaction that is attained. The case is suitable for courses in management science, operations management, human resource management, and tourism.

Keywords

Customer satisfaction Decreasing Returns optimization Singapore Travel Industry