• A&B Coaches plan their capacity in terms of ‘coach-days’. They classify their business as either ‘full day’, or ‘half day’. Forecasts show expected annual demands for the next two
years to average 400,000 full-day passengers and 750,000 half-day passengers.
• A&B have 61 coaches, each with an effective capacity of 40 passengers a day for 300 days a year. Breakdowns and other unexpected problems reduce efficiency to 90%. They employ 86 drivers who work an average of 220 days a year, but illness and other absences reduce their efficiency to 85%.
• If there is a shortage of coaches the company can buy extra ones for £110,000 or hire them for £100 a day. If there is a shortage of drivers they can recruit extra ones at a cost of £20,000 a year, or hire them from an agency for £110 a day.
• How can the company approach its tactical planning?