Tabung Haji Case Study: Quantitative Analysis

Built around Malaysia’s Hajj fund, this assignment asks postgraduate students to show how quantitative tools support real public-sector decisions. Using Tabung Haji’s fixed RM33,300 Hajj cost, the RM234 million HAFIS subsidy for B40 and M40 pilgrims and its long-term airline and hotel contracts, students explain probability-based risk assessment, critical path scheduling with PERT/CPM and PERT/Cost, break-even and cost-benefit evaluation, and ROI and marginal analysis of extra spending.

Case Study: Tabung Haji

Lembaga Tabung Haji (TH) is preparing for the 1448H/2027 Hajj season, with Malaysia receiving an official quota of 31,600 pilgrims. TH has kept the Hajj cost for Muassasah pilgrims at RM33,300 per person for the fourth consecutive year, despite inflation, global economic uncertainty, rising oil prices, higher supply costs and increasing service costs in Saudi Arabia.

To support eligible pilgrims, TH continues to provide targeted Hajj financial assistance (HAFIS), with approximately RM234 million allocated for the 2027 season. B40 pilgrims pay RM15,000, M40 pilgrims pay RM23,500 and T20 pilgrims pay the full Hajj cost of RM33,300. Since HAFIS was introduced in 2001, TH has provided more than RM2.8 billion in financial assistance.

Almost 90% of the total Hajj cost is associated with accommodation, flights and services in Saudi Arabia. To manage these costs, TH uses early planning, strategic negotiations, long-term contracts and risk management, such as five-year contracts with airline service providers and direct negotiations with hotels for better accommodation rates.

Before each season TH must also issue offer letters, verify pilgrims’ eligibility and health requirements, run Hajj preparation courses at more than 200 mosques nationwide, arrange flights and accommodation, coordinate service providers and complete operational preparations on time. TH therefore has to balance affordability, operational efficiency, service quality and long-term financial sustainability.

Source: adapted from The Edge Malaysia (2026), “Tabung Haji: Haj offer letters for 31,600 prospective pilgrims to be issued from Sept 21.”

Instructions

1. Answer ALL questions based on the Tabung Haji case study.
2. Support your answers with relevant information from the case and appropriate quantitative analysis concepts.

Question 1: Probability Concepts and Applications (25 marks)

Tabung Haji operates in an environment affected by uncertainties such as inflation, oil prices, service costs, flight costs and operational requirements.

1. Identify three uncertainties from the case and explain how probability concepts can assist Tabung Haji in assessing and managing these uncertainties. (9 marks)
2. Differentiate between discrete and continuous probability distributions. Using the case, provide one appropriate example of a variable for each type of distribution and justify your answer. (8 marks)
3. Explain how probability analysis can assist Tabung Haji in improving forecasting and resource allocation for future Hajj operations. (8 marks)

Question 2: Project Management, PERT/CPM and PERT/Cost (25 marks)

Tabung Haji must coordinate several activities before the Hajj season, including issuing offer letters, verifying pilgrims’ requirements, conducting preparation courses, and arranging flights and accommodation.

1. Based on the case, identify six major activities involved in Hajj preparation and arrange them in an appropriate sequence. (6 marks)
2. Explain how PERT/CPM can be applied to identify the critical path and assist Tabung Haji in completing its Hajj preparations within the required timeframe. (10 marks)
3. If one of the critical activities is expected to be delayed, explain how PERT/Cost can assist Tabung Haji in shortening the project duration while controlling additional costs. (9 marks)

Question 3: Break-Even Analysis and Cost-Benefit Analysis (25 marks)

The Hajj cost is RM33,300 per pilgrim, while eligible B40 and M40 pilgrims receive financial assistance through HAFIS. Approximately RM234 million has been allocated for targeted Hajj financial assistance.

1. Explain how break-even analysis can assist Tabung Haji in evaluating the relationship between the cost of Hajj operations, the number of pilgrims served and the amount collected from pilgrims. (8 marks)
2. Using cost-benefit analysis, identify and explain three costs and three benefits associated with providing HAFIS to eligible pilgrims. (9 marks)
3. Explain how the findings from break-even and cost-benefit analyses could assist Tabung Haji in making decisions regarding future Hajj costs and financial assistance. (8 marks)

Question 4: Return on Investment and Marginal Analysis (25 marks)

Almost 90% of Hajj costs are associated with accommodation, flights and services in Saudi Arabia. Tabung Haji uses strategies such as long-term flight contracts, hotel negotiations and early planning to manage these costs.

1. Explain how Return on Investment (ROI) can be used to evaluate an operational improvement undertaken by Tabung Haji. Provide one relevant example from the case. (8 marks)
2. Apply marginal analysis to explain how Tabung Haji could decide whether additional expenditure on accommodation, flights or Hajj services is worthwhile. (8 marks)
3. Evaluate why Tabung Haji should consider both financial and non-financial benefits when making decisions about additional investment in Hajj operations. Support your answer with examples from the case. (9 marks)

Expert Answers on Above Questions on Accounting, Project Management & Statistics

Probability Concepts and applications

Three uncertainties and probability Concepts – these include oil and flight cost, as the rising oil prices increases the airfare cost, and it is possible to apply distribution on the basis of historical price changes to estimate the likelihood of cost increases and prepare contingency budgets. Another uncertainty is Saudi accommodation cost, as there would be an increase in the hotel prices charges whereby scenario probabilities can help estimate the risk of exceeding accommodation budget and negotiate long term contracts. The third major uncertainty is operational delays which could involve probability estimates to calculate the likelihood of late completion and utilise additional staff to high risk activities.

Discrete and continuous probability distribution

Discrete distribution represents countable outcomes such as the number of pilgrims whose health verification is incomplete, and continuous distribution indicates measurement that can take any value within a range such as the flight cost per pilgrim.

Probability analysis for forecasting and resource allocation

The estimation of expected cost and operational risk can be possible for TH using historical flight prices, hotel rates, inflation and processing times.

Project management, PERT/CPM and PERT/Cost

Six major activities and their sequence – the first one is to confirm the Hajj quota and operational plan which is followed by issuing Hajj offer letters. The third step includes verification of pilgrims eligibility and health requirements, while the fourth step is to conduct Hajj preparation courses. The 5th step in the sequence is to finalise flights, accommodation and Saudi service arrangements while the final step is to complete the operational checks and confirm departure schedules.

Applying PERT/CPM

PERT – the estimation for uncertain activities are carried out by TH as optimistic, most likely and pessimistic completion times.
CPM – TH maps activities, durations and dependencies in order to identify the longest sequence which is also known as critical path.
Slack – activities on the critical part have zero total slack, and any kind of delays in these activities have a direct impact on the completion date
Practical application – In the given scenario, TH is required to monitor both activities closely in the instance of delays threatening deadline provided the health verification have to finish before final passenger documentation.

Applying PERT/Cost depend to shorten project duration

By applying PERT, it becomes possible for TH to compare the cost of accelerating an activity with financial consequences of delay. For example, the normal duration is 10 days at RM20000 and the accelerated duration is 7 days at RM26000. This leads to us saving 3 days, an additional cost of RM 6000 and cost per day saved is RM2000. It is beneficial for TH to accelerate the activity if the value of meeting the deadline is far more than RM6000, and the required quality is maintained.

Break Even analysis and Cost benefit analysis

Break Even analysis can be used to identify the number of pilgrims required for revenue to equal total operating costs. The total operating cost for TH includes flights, accommodation and Saudi services, whereas the revenue includes pilgrims payment and other funding. The Hajj cost of RM33000 is not essentially the amount collected from every pilgrim, and it is therefore important for TH to differentiate the full cost of service from the amount paid by each income group.

Three cost and three benefits of HAFIS

The costs are financial assistance expenditure, opportunity cost and administrative cost, while the benefits are affordability, financial inclusion and social equity. It is affordable in the sense that B40 pilgrims pay RM15000 rather than RM33000, and financial inclusion is achieved as M40 pilgrims pay RM23500, thereby receiving assistance of RM9800 per pilgrim.

Using the analysis for future decision

With the application of break even analysis, it is possible for TH to estimate the funding and pilgrim payment levels needed to cover the operating cost. With the application of cost benefit analysis, it would be possible to evaluate whether the social benefits of HAFIS justify its financial commitment.

Return on investment in marginal analysis

Return on investment is useful in measuring financial return generated by an investment in relation to its cost. While marginal analysis is useful in comparing the additional cost of an activity with its additional benefit. For example, TH may consider spending an additional RM 500000 for better accommodation close to the holy sites. The marginal cost would be additional RM 500000 and the marginal benefit is reduced travel time, improved accessibility and better pilgrim comfort.

Financial and non-financial benefit

It is important to consider both Financial return and service outcomes because Hajj operations include religious responsibilities and pilgrim welfare. The financial benefits are in the form of long-term airline contracts that would assist in reducing fare uncertainty. The non-financial benefit would include safety and health, comfort and accessibility, reliability and equity, as the cost saving decisions would make Hajj more affordable for B40 and M40 pilgrims.

Want Detailed Answers with References?

Analysis of Tabung Haji by utilising probability distributions, PERT/CPM, break even and cost benefit analysis including ROI and marginal decision making above revealed important findings. With a professional statistician expert, you can expect to get assistance with your statistics assignment easily. Simply visit our Malaysian assignment help page to get a professional expert for your assignment, or perform a review of solved assignment answers from University Malaya (UM) before making a decision.