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Optimal Ordering Strategy for Car Rental Enterprises with Shared Renting Capacity

Published: 24 July 2021 Publication History

Abstract

Car rental demand is often unpredictable, which leads to excess or insufficient renting capacity. This study employs the classical Newsboy Model, based on game theory, to establish an optimal car ordering strategy with shared renting. It compares optimal ordering quantities and total profits when car rental enterprises operate independently as well as when they adopt a shared renting capacity strategy. The results show that the latter strategy reduces optimal car ordering quantities, increases the working capital of both enterprises, and increases their profits. Finally, Pareto improvement is realized, and a win-win outcome is achieved.

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              ICMSS 2021: Proceedings of the 5th International Conference on Management Engineering, Software Engineering and Service Sciences
              January 2021
              180 pages
              ISBN:9781450389709
              DOI:10.1145/3459012
              Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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              Association for Computing Machinery

              New York, NY, United States

              Publication History

              Published: 24 July 2021

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              Author Tags

              1. Car rental enterprise
              2. Ordering strategy
              3. Shared renting capacity

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