Revenue Models and Policies for the Car Rental Industry

Carravilla

2017

Omega

This paper aims to present, dene and structure the car rental eet management problem, which includes operational eet management issues and problems traditionally studied under the revenue management framework. The car rental business has challenging and distinctive characteristics, which are mainly related with eet and decision-making exibility, and that render this problem relevant for academic research and practical applications. Three main contributions are presented: an in-depth literature review and discussion on car rental eet and revenue management issues, a novel integrating conceptual framework for this problem, and the identication of research directions for the future development of the eld.

Section: Discussionmentioning

confidence: 65%

Section: Operational Issues In Car Rental Eet Managementmentioning

confidence: 99%

Fleet and revenue management in car rental companies: A literature review and an integrated conceptual framework

Carravilla

2017

Omega

European Journal of Operational Research

“…Both works report the improved performance of their proposed policies over the deterministic linear programming (DLP) heuristic. In a more recent work, Guerriero and Olivito (2014) incorporate one way rentals into the booking controls, along with consideration of shuttling and upgrade. Like Schmidt (2009), they present a dynamic program for the problem without considering the solution methods.…”

Section: Literature Reviewmentioning

confidence: 99%

Dynamic booking control for car rental revenue management: A decomposition approach

Pang

2017

Highlights• We consider dynamic booking controls for car rental revenue management.• A decomposition approach and two dynamic heuristic policies are proposed.• Their strong revenue performance is in contrast to the PNLP policy used in practice.• The proposed policies are robust to vehicle transhipment cost while PNLP not.• The PNLP policy might still work well in peak seasons and downtown rental stations. Different from conventional airline revenue management, car rental revenue management needs to take into account not only the existing bookings but also the lengths of the existing rentals and the capacity flexibility via fleet shuttling, which yields a high-dimensional system state space. In this paper, we formulate the dynamic booking control problem as a discrete-time stochastic dynamic program over an infinite horizon.Such a model is computationally intractable. We propose a decomposition approach and develop two heuristics. The first heuristic is an approximate dynamic program (ADP) which approximates the value function using the value functions of the decomposed problems. The second heuristic is constructed directly from the optimal booking limits computed from the decomposed problems, which is more scalable compared to the ADP heuristic. Our numerical study suggests that the performances of both heuristics are close to optimum and significantly outperform the commonly used probabilistic non-linear programming (PNLP) heuristic in most of the instances. The dominant performance of our second heuristic is evidenced in a case study using sample data from a major car rental company in the UK.

“…The proposed model is applied to the analysis of a car rental company in Taiwan. Guerriero and Olivito [17] considered the application of revenue management techniques in the context of the car rental industry. In particular, Guerriero and Olivito [17] presented a dynamic programming formulation for the problem of assigning cars of several categories to consumers, with rental requests arising dynamically and randomly with time.…”

Section: Rental Servicementioning

confidence: 99%

“…Due to different procurement processes of PSS, the procurement of new products and the rental products are analyzed. Guerriero and Olivito [17] addressed a rental scenario where the rental service can start and end at different locations. In the devised framework, the logistics operator decided whether to accept or reject a rental request.…”

Section: Rental Servicementioning

confidence: 99%

Sustainable Rent-Based Closed-Loop Supply Chain for Fashion Products

Chen

et al. 2014

Sustainability

Abstract:The textile and clothing industry generates much pollution and consumes a large amount of resources. Improper uses and disposal of clothing products make the problems much more severe. Fast fashion products shorten the valid lifecycle and generate more waste than regular clothing products. Considering the features of fashion products, a system of a rent-based closed-loop supply chain is developed to improve the sustainability of fashion products. The supply chain processes (fashion design and manufacturing, laundry, logistics and disposal), the operations management issues (inventory management, closed-loop logistics, human-clothing matching, booking system and the rental pricing) and the sustainability promotion aspects (customization, responsive system, culture and policy aspects) are investigated by devising sustainable strategies. The rationalities of the developed system and strategies are reviewed and elucidated in detail. The results may contribute to building sustainable closed-loop fashion supply chains, the related information systems and operational and managerial mechanisms.