From:David Greene <greene+@andrew.cmu.edu>Date:29 Feb 96 01:24:25

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I have a business budgetting issue I'm trying to understand... I'm trying to figure out how airlines would plan their annual and quarterly budgets for engine maintainence costs? I'm assuming that the marketing people estimate how much traffic and what routes they'll be serving, from that the engineers could estimate the potential number of hours and cycles on the engines. From what I understand, the timing of engine overhauls is rather hard to forecast -- now statistically it might be possible to estimate for a given number of planes and estimated flight hours or cycles that you'd have a probability distribution across parts so that you could calculate an expected value... but for timing of labor and inventory needs are there distributions that can be assigned to when failures would occur? Or are there other approaches, perhaps maintainence simulators that are used commercially? Are these assumptions reasonable or is there a completely difference budgetting process? Many thanks for any help or pointers to useful references. -David