Equuleus Car Sharing Inc.: A Revenue Management Case Study
(2 pages of text)
Case (Gen Exp)
In 2017, Equuleus Car Sharing Inc. (ECS) was a relatively new player in the rental car industry, with annual revenues approaching US$100 million. ECS had experienced significant growth since its founding in 2014 due to its focus on low prices and a mix of high-demand vehicle types–specifically, minivans, sport utility vehicles, sedans, and economy cars. ECS management wished to examine the opportunity to purchase new vehicles through financing versus the traditional method of paying cash for dramatically expanding the fleet size. The goal was to develop a fleet purchasing strategy that maximized the present value of net income.
The case can be used in a core analytics or operations management course at the undergraduate or graduate level. The case focuses on the use of linear programming in determining the level of production outsourcing. After working through the case and assignment questions, students will be able to do the following:
- Appreciate the growing role of revenue management in the rental car industry.
- Identify key constraints in the fleet purchase process.
- Understand how prescriptive analytics can be used to develop a vehicle purchasing plan.
- Assess the impact of changes in key model constants on the optimal solution using sensitivity analysis.
- Recognize the dynamic nature of the rental car market.
Canada; United States, Medium, 2017
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