Title: Modelling the rental car pricing and relocation problem

Authors: Tim Madden; Robert A. Russell

Addresses: Dollar Thrifty Auto Group, Inc., 5330 E. 31st Street, Tulsa, OK 74135, USA. ' Department of Finance and Operations Management, Collins College of Business, The University of Tulsa, 800 South Tucker Drive, Tulsa, OK 74104, USA

Abstract: At rental car companies, revenue management activities include: determining rental prices, implementing capacity controls, and repositioning the fleet. A rolling horizon linear programming model is developed to provide decision support and to help to integrate the pricing and relocation decisions. The model incorporates regional rental locations, multiple car classes, different price levels, and different lengths of rent within a 28-day planning horizon. The unique formulation facilitates the solution of the large-scale problem. Computational requirements, results, and implementation difficulties are reported for a regional test problem for a major car rental company.

Keywords: pricing decisions; revenue management; optimisation; linear programming; rental car industry; rental prices; capacity control; fleet repositioning; rolling horizon; decision support; relocation decisions; regional rental locations; price levels; rent lengths.

DOI: 10.1504/IJRM.2012.050400

International Journal of Revenue Management, 2012 Vol.6 No.3/4, pp.246 - 257

Published online: 17 Nov 2012 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article