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In: Operations Management

Hervis Car Rental in Austin, Texas, has 50 high-performance Shelby-H Mustangs in its rental fleet. These...

Hervis Car Rental in Austin, Texas, has 50 high-performance Shelby-H Mustangs in its rental fleet. These cars will be in greater demand than usual during the last weekend in July when the Central Texas Mustang Club holds its annual rally in Austin. At times like this, Hervis uses a revenue management system to determine the optimal number of reservations to have available for the Shelby-H cars.

Hervis has agreed to have at least 60% of its Shelby-H Mustangs available for rally attendees at a special rate. Although many of the rally attendees will request a Saturday and Sunday two-day package, some attendees may select a Saturday-only or a Sunday-only reservation. Customers not attending the rally may also request a Saturday and Sunday two-day package, or make a Saturday-only or Sunday-only reservation. Thus, six types of reservations are possible. The cost for each type of reservation is shown here.

Two-Day

Saturday-

Sunday-

Package

Only

Only

Rally

$125

$75

$65

Regular

150

85

75

The anticipated demand for each type of reservation is as follows:

Two-Day

Saturday-

Sunday-

Package

Only

Only

Rally

20

10

15

Regular

10

20

25

Hervis Car Rental would like to determine how many Shelby-H Mustangs to make available for each type of reservation in order to maximize total revenue.

  1. Determine an optimal solution.

Solutions

Expert Solution

Hi,

Please find answers as below. I have used excel solver to solve the problem.

I have attached snapshots of input data, formulas and constraints used along with the optimal solution.

Answer

1. Snapshot of Input Data

2. Snapshot of Formula used

3. Snapshot of Constraint used

4. Snapshot of Optimal Solution

keosha answered 1 month ago
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