Client: Budget Rent a Car System, Inc. is a global leader in car rental services with over 2,700 locations across 120+ countries.
Challenge: Budget faced a critical logistics optimization challenge in effectively pricing and deploying vehicles to maximize fleet utilization while minimizing costs.
The two primary challenges were:
Rental Cost Determination: The client required a statistical model to set optimal rental fees based on car category and rental duration, which varied from hours to weeks.
Fleet Management: The existing car rental system accepted reservations based on a macro analysis of fleet availability. This resulted in a lack of precision in forecasting demand, leading to issues like overbooking. The client required a predictive model to forecast reservations and optimize resource allocation.
Solution: SSI’s engineers developed an advanced statistical forecasting platform leveraging extensive experience in revenue and yield management. This platform analyzes current and historical reservation data through intelligent algorithm processing to run scenarios considering capacity variations, customer preferences, overbooking costs, and rental durations.
The solution led to:
Optimal Reservation Forecasts: The system predicted the ideal number of reservations for each car category.
Pricing Recommendations: The platform provided data-driven pricing strategies based on demand forecasts.
Result: The advanced statistical forecast platform for revenue and yield management helped the client optimize and maximize the total revenue and yield capacity, significantly reducing the company’s operational challenges. The solution developed by SSI led to better resource allocation, cost saving, and minimizing issues such as overbooking and price inconsistencies.
