Case Study Analysis and Solutions

Simulation ID: 7005

Abstract:
Simulation Solution for Pricing Simulation: Universal Rental Car V2 by John T. Gourville, Tom Nagle, John Hogan
At a Florida rental car agency, students assume the role of a district manager responsible for setting prices for rental cars across three Florida cities: Miami, Orlando, and Tampa. Over 12 simulated months, students must analyze price sensitivity between leisure and business travelers and consider strategies that maximize rentals across weekdays and weekends in each city. Demand for rental cars can vary depending on the month and whether the location is more popular with business or leisure travelers. Unrented cars have associated holding costs while running out of cars is lost opportunity for profit. Students can make periodic inventory adjustments among the locations to match anticipated demand. The market for rental cars in Florida is intensely competitive and students must also consider the likely competitive response to their pricing decisions. Ultimately, students must analyze the economic, seasonal, and competitive forces of the rental car market and develop a pricing strategy to maximize the cumulative profit for the firm. Students benefit from running the simulation multiple times with increasing complexity. This single-player simulation includes three pre-set scenarios or faculty can design custom scenarios to meet specific learning objectives

Keywords:
Competitor analysis, Economics, Marketing, Microeconomics, Prices, Pricing, Simulations, Strategy, Pricing Simulation Universal Rental Car V2 Solution

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