American Airlines Uses Should‐Cost Modeling to Assess the Uncertainty of Bids for Its Full‐Truckload Shipment Routes

American Airlines Uses Should‐Cost Modeling to Assess the Uncertainty of Bids for Its Full‐Truckload Shipment Routes

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Article ID: iaor20113978
Volume: 41
Issue: 2
Start Page Number: 194
End Page Number: 196
Publication Date: Mar 2011
Journal: Interfaces
Authors: , , , , , ,
Keywords: transportation: air
Abstract:

We used decision analysis to develop a probabilistic model to help American Airlines assess the uncertainty of bid quotes for its full‐truckload (FTL) point‐to‐point freight shipments of maintenance equipment and in‐flight service items in the United States. The model reduced the airline's risk of overpaying an FTL supplier.

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