Ian Thompson is the parts inventory manager for Chesapeake Airlines. In this capacity, Ian decides what engine parts to stock at various airports around the country. Ian is also responsible for coordinating with other airlines to locate a part if one is not available off the shelf.
Chesapeake is a discount carrier that competes by offering low-cost flights between underserved airports and wringing the maximum efficiency out of its assets. The airline buys only used aircraft and relies on its engineering staff to keep the plane up in the air as much as possible. Internal documents stress that a plane on the ground makes no money for the airline. On-time arrival and cost relative to other carriers are two of the key criteria the firm monitors on an almost daily basis. All bonus payments to managers depend on these measures.
Ian believes that the current system is fair to staff who operate the plane, handle baggage, or otherwise influence on-time arrival. “I can influence costs by managing inventory but making my bonus depend on on-time arrival is downright silly,” he argues. Instead, he suggests that local measures such as cost per maintenance hour or the ratio of actual to standard time for the scheduled maintenance performed reflect his performance better. “After all, these items are within my control, and I can show you how my department is containing cost. My numbers on this front are the best in the game,” he says. Probing, you discover that he is upset that his costs often spiral out of control when there is an unscheduled request for repair, requiring parts to be flown in from other airports or be bought from other airlines at premium prices.

Required:
Comment on the validity of Ian’s assertion.