SIMULATION ON PRICING FOR DIFFERENT MARKETS

Simulation Description
Customer Segment:
1. Business Travellers
2. Leisure Travellers
Target Markets:
1. Miami
2. Orlando
3. Tampa
Product:
1. ented Cars
!otes:
"emand #or rental cars can var$ depending on t%e mont% and &%et%er t%e location is
more popular &it% 'usiness or leisure travellers
Over 12 simulated mont%s( students must anal$)e price sensitivit$ 'et&een leisure
and 'usiness travellers and consider strategies t%at ma*imi)e rentals across &eekda$s
and &eekends in eac% cit$
+nrented cars %ave associated %olding costs &%ile running out o# cars is lost
opportunit$ #or pro#it
+nrented cars %ave associated %olding costs &%ile running out o# cars is lost
opportunit$ #or pro#it
Make periodic inventor$ ad,ustments among t%e locations to matc% anticipated
demand
T%e market #or rental cars in -lorida is intensel$ competitive and students must also
consider t%e likel$ competitive response to t%eir pricing decisions
+ltimatel$( students must anal$)e t%e economic( seasonal( and competitive #orces o#
t%e rental car market and develop a pricing strateg$ to ma*imi)e t%e cumulative pro#it
#or t%e #irm
Situation .nal$sis:
Congratulations on $our ne& role as a district manager #or t%e -lorida region o# t%e
+niversal ental Car Compan$
-lorida is +niversal/s &orst per#orming region. "espite e*ceptional gro&t% in t%e
-lorida market( operatin pro!it per car is "ell #elo" Uni$ersal%s a$erae
T"o pro#lems plague t%e region. 0Stoc& outs(0 &%ic% occur during demand peaks(
and 0unsol' in$entor((0 &%ic% occur in demand valle$s. Making matters &orse( t%ere
is an intense pricing &ar 'et&een +niversal( and its Competitor
O',ective:
"evelop a pricing strateg$ t%at &ill improve #inancial results #or +niversal1s -lorida region
over t%e ne*t 12 mont%s
From Manaement
Scenario C: .dvanced
2n t%is scenario( $ou set separate &eekda$ and &eekend prices in Tampa( Orlando(
and Miami.
"emand #or cars varies seasonall$ &it% eac% location. Look at $our market sales
report #or a #orecast o# %o& demand mig%t var$ over time.
3ver$ t%ree mont%s $ou can reallocate $our inventor$ &it%in Tampa( Orlando( and
Miami( 'ut car inventor$ is limited to t%e total ve%icles availa'le in all t%ree locations.
Per#ormance 3valuation:
.t t%e end o# t%e calendar $ear( management &ill evaluate $our per#ormance 'ased on t%e
#ollo&ing metrics:
Cumulative Pro#it
-inal Market S%are
Capacit$ +tili)ation
-inal Mont%/s Pro#it
Cumulative +nit Sales