I have been working for Hertz Car Rental as a sales operations manager for three years and the main challenge that I have been facing is lack of flexibility in adapting to variations in the demand for particular cars. The car rental industry is one of the most dynamic due to the fact that its market is largely dependent on the season and the weather conditions (Carroll and Grimes. 1995, p 84). For instance, on special events and during holiday’s specific type of cars are usually on high demand than others. This proposal suggests possible ways of coping with the variations in the demand for specific cars considering both the cost of implementing the new strategies and the benefits in form of profits.
How to cope with high demand
There have been significant changes in the demand for luxurious cars and small compact cars during weekdays and weekends respectively. During week days there are more businessmen that require our services and this increases the demand for the luxurious cars. During these days most of the small compact cars are free. On the other hand, during weekends and holidays seasons the opposite happens in that, most of the luxurious cars do not have customers while the small compact cars are all occupied.
Since increasing the number of cars cannot solve our problem, the best possible solution is to allow our customers to enjoy cars from the immediate next level at a relatively lower price. If a customer requests for a compact car and there is none that is available at that moment, we will be offering a little bigger car at a lowered price. The second strategy involves registering frequent customers with the aim of retaining. The best way of doing this is by allowing registered members a discount, and for one to qualify as a member he has to have rented a car for at least three times in a period of one year. Ensuring that the registered members are always served will help in coping with the variation in the demand for certain cars in that, it would be easier to predict and forecast the demand patterns.
The main challenge involves the demand of certain customers who prefer the small cars to the luxurious cars due to their low fuel consumption rate.
This problem is solved by the second strategy in that, all the registered with specific demands members are in some way prioritized over others.
Carroll, W. J., and Grimes, R. C. (1995). Evolutionary change in product management: Experiences in the car rental industry. Interfaces, Vol. 25, No.1, p 84.