Case Article—Tactical Decisions at Vastrapur Car Rental Services

Balaraman Rajan () and N. Ravichandran ()
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Balaraman Rajan: Department of Management, College of Business and Economics, California State University East Bay, Hayward, California 94542
N. Ravichandran: Indian Institute of Management Ahmedabad, Ahmedabad, Gujarat 380015, India

INFORMS Transactions on Education, 2017, vol. 18, issue 1, 48-51

Abstract: Vastrapur Car Rental Services operating in Ahmedabad, Gujarat State, India offers five different options to its rental customers. Each option has a usage agreement (limits on mileage and duration) and rental rate and some customers exceed these limits. The central theme of the case is to compute the average profitability in the context of limited fleet size, uncertainty related to number and type of customer requests, and variability in the utilization of vehicles. In addition, the case provides an opportunity to discuss situations like negotiating wages, outsourcing vehicles on a need basis, and subscribing capacity to an integrator (an online platform linking the supply and the demand sides). The case was given to MBA students in a core probability course and a core decision sciences course. The discussion can span over one or two classes depending on the students' background and nature of the course. The case helps students apply different concepts in probability (including random variables and expected value) to analyze a real-life managerial situation. When resolved appropriately, it demonstrates the power of simple probabilistic tools in addressing managerial challenges. The case is amenable for a simulation based analysis to study the interplay between demand variability (quantity and mix) and economic consequences in multiple scenarios.

Keywords: probability; random numbers; expected value; sensitivity; simulation (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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