Title: Modelling and solving a car rental revenue optimisation problem

Authors: Francesca Guerriero, Filomena Olivito

Addresses: Department of Electronics, Computer Science and System, University of Calabria, 87036 Rende (CS), Italy. ' Department of Electronics, Computer Science and System, University of Calabria, 87036 Rende (CS), Italy

Abstract: We address the problem of a car rental agency that is confronted with how to decide to accept or reject a booking request to optimise the revenue. An innovative integer programming model is devised, which incorporates particularities of the car rental business, like multi-day rents and non-cascading upgrades. To capture the randomness of the demand, robustness measures and the related scenario-based formulations are presented. An extensive computational study is carried out, by considering a set of randomly generated instances. The collected computational results show the relation between problem size and computation time and the effect of risk-aversion on revenue.

Keywords: revenue management; car rental revenue; integer linear programming; robust optimisation; risk aversion; modelling; car rental agencies; multi-day rents; non-cascading upgrades.

DOI: 10.1504/IJMOR.2011.038911

International Journal of Mathematics in Operational Research, 2011 Vol.3 No.2, pp.198 - 218

Available online: 06 Mar 2011 *

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