Managing rental car businesses in the new economy : using a multivariate decision model approach

U.S. rental car organizations are having to modify their business models to adapt to the new economy, which includes increased fuel costs, reduced business and leisure travel, and reduced resale of low mileage rental units. Revenue is negatively impacted due to increased maintenance as a result of higher mileage requirements placed on the rental inventory. Changes in the depreciation allowance on the rental car fleet reduced the potential value of vehicles by requiring fleet operations managers to maintain the fleets for longer periods of time. This article presents a multivariate decision-making model, which used in conjunction with in-house performance indicators, will assist operations managers in understanding specific variables likely to impact rental car revenues and optimize their decisions regarding available assets.