If the training school owned all of the training planes, what would be the best formula for monitoring and managing the cost effectiveness of your planes, assuming that maintenance costs and fuel costs cover all of your plane operating costs, and maintenance costs per plane are fixed?

(A) Total fuel costs per plane + Total maintenance costs per plane = Total operating costs per plane

(B) Total fuel costs + Total maintenance costs = Total operating costs

(C) Total operating costs per plane

(D) Average flight hours per plane per month x (monthly fuel costs per flight hour + monthly maintenance costs per flight hour) = Total operating costs per plane

Explanation

If the training school owned all of the training planes, the best formula for monitoring and managing the cost effectiveness of your planes is given by the formula:

Average flight hours per plane per month x (monthly fuel costs per flight hour + monthly maintenance costs per flight hour) = Total Operating costs per plane

Conclusion

This question is a part of the Weekly Quiz 4 section from the Organisational design: Know your organisation course. You can check out all the quiz answers to this exam in our Organisational design: Know your organisation Quiz Answers page.