Evaluate a Kochi itinerary redesign
Before the decision
Tour completion improved after a shorter route launched near the end of the hot season. The original tour depended on a long outdoor segment. The shorter pilot changed both walking time and the mix of stops, so the operator cannot yet tell what drove completion.
The problem
Should the team choose Short route or Current route for the next 12 months?
Decision owner: The business unit lead.
Weather and trip length changed at the same time.
Option economics
Scroll the table to see all figures.
| Option | Volume (completed tours) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Short route | 34,000 | 220 | ₹58 lakh | ₹16.8 lakh |
| Current route | 29,000 | 245 | ₹52 lakh | ₹19.05 lakh |
Make the call
- Calculate net contribution for Short route and Current route. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer completed tours, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Current route. It contributes ₹19.05 lakh after fixed costs and leads by ₹2.25 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Specify the eligible population and the outcome before collecting data. Treat the figures as planning estimates. Use comparable groups to measure the effect before rollout.
- Calculate both options
Short route: 34,000 completed tours × ₹220 less ₹58 lakh in fixed costs gives ₹16.8 lakh. Current route: 29,000 completed tours × ₹245 less ₹52 lakh in fixed costs gives ₹19.05 lakh.
- Stress-test the forecast
Current route leads by ₹2.25 lakh in the base case. If Current route delivers 10% fewer completed tours (26,100) at the same margin and fixed cost, it contributes ₹11.95 lakh. Holding the other option constant, the stressed result falls behind. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Current route needs at least 28,082 completed tours to match or beat it under the model. Assign routes by time block and compare cancellations within similar weather.
Weather and trip length changed at the same time. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Short route | Current route | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹9.32 lakh | ₹11.95 lakh | Current route |
| Base assumptions | ₹16.8 lakh | ₹19.05 lakh | Current route |
| Both gain 10% of volume | ₹24.28 lakh | ₹26.16 lakh | Current route |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.