Case Study Henry Clements Car Rental Agency

1. What should his forecast be using this method?

2. What would the forecast be if he used regression analysis?

3. What about time-series forecasting?

4. What will you tell him about which is the best option?

Henry has two people who can check cars out for a rental. One works at the service counter and the other works in the office and can come out to help if needed. Henry has determined that people arrive following a Poisson distribution. Rentals average about 24 per day and the service person takes about 15 minutes to process a customer for a rental. Henry sees that the agent at the service counter in not busy all the time so he is contemplating not keeping the office person trained and leaving only the service counter person.

5. Is this a wise move?

6. What is the average time the customer takes from when he/she arrives until he/she has a car?

Currently, when the office person in serving customers, a second line forms in front of the counter.

7. Is that how Henry should set up the waiting area or is there a better way?

When a car is returned to his location, Henry has three employees who prepare the car for the next rental. As a car arrives, one of the employees takes the car and washes, cleans, vacuums, and inspects it, prepares the paperwork for the next rental, and returns the car to the lot. The employees each take a car in sequence. Henry has observed the process and has observed the time each takes to complete each step. The information about the times (in minutes) is as follow:

Employees Wash Vacuum Inspect & Return

Beverly 22 13 11

Cameron 15 17 20

Tina 19 19 14

8. Is there is a better way to organize this part of the operations?

Each rental requires two agreement forms, one for when the car is checked out and one when it is checked in. Henry orders these forms from a local printer. The printer charges Henry $40 to set up the printer. The forms cost 50cents each. Because of the damage to the forms and the forms becoming obsolete, it cost Henry 25% to store the forms. The printer will only accept orders in multiples of 100.

9. If the three months of data collected and presented above is indicative of all demand, how many forms should Henry order?

The printer offers Henry a 10% discount if Henry orders 5000 or more form at a time.

10. Would this be advantageous to Henry? How much money would it save, if any?

Henry is now ready compute what do with the cars on Sunday. The other locations report the following on-hand and needed cars. Henry will have 150 cars on-hand Saturday night.

Location North Location East Location South On-hand 165 160 200 Needed 195 160 190 Based on past experience, the cost to move cars is:

Between And Cost

Henry Location North $12

Henry Location East $22

Henry Location South $17

Location North Location East $7

Location North Location South $28

Location East Location South $14

11. How many cars will need to be moved and what will the total cost of the move be?

12. Based on all the above computations, what would you recommend to Henry about his operation and what changes would you propose (if any)?