Optimal Ordering Strategy for Car Rental Enterprises with Shared Renting Capacity

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.