Inventory In Airline Industry
Service businesses cannot normally stockpile their output, because the time bound nature of service delivery makes it impossible to inventory the finished goods. For example, the potential income from an empty seat of an airline flight is lost forever once the flight takes off.
Conversely, when demand for service exceeds supply, the excess business may be lost. If someone cannot get a seat on one flight another carrier gets the business or the trip is cancelled or postponed. The inventory for airline industry is mainly the food and the aircrafts spares and parts. Airlines face the problem of inventory mainly due to irregular demand patterns.
4 Comments