SIMULATION ON PRICING FOR DIFFERENT MARKETS Simulation Description Customer Segment: 1. Business Travellers 2.

Leisure Travellers Target Markets: 1. Miami 2. Orlando 3. Tampa Product: 1. Rented Cars Notes: Demand for rental cars can vary depending on the month and whether the location is more popular with business or leisure travellers Over 12 simulated months, students must analyze price sensitivity between leisure and business travellers and consider strategies that maximize rentals across weekdays and weekends in each city Unrented cars have associated holding costs while running out of cars is lost opportunity for profit Unrented cars have associated holding costs while running out of cars is lost opportunity for profit Make periodic inventory adjustments among the locations to match anticipated demand The market for rental cars in Florida is intensely competitive and students must also consider the likely competitive response to their pricing decisions Ultimately, students must analyze the economic, seasonal, and competitive forces of the rental car market and develop a pricing strategy to maximize the cumulative profit for the firm

Situation Analysis: Congratulations on your new role as a district manager for the Florida region of the Universal Rental Car Company Florida is Universal's worst performing region. Despite exceptional growth in the Florida market, operating profit per car is well below Universal's average Two problems plague the region. "Stock outs," which occur during demand peaks, and "unsold inventory," which occur in demand valleys. Making matters worse, there is an intense pricing war between Universal, and its Competitor Objective: Develop a pricing strategy that will improve financial results for Universals Florida region over the next 12 months From Management Scenario C: Advanced In this scenario, you set separate weekday and weekend prices in Tampa, Orlando, and Miami. Demand for cars varies seasonally with each location. Look at your market sales report for a forecast of how demand might vary over time. Every three months you can reallocate your inventory within Tampa, Orlando, and Miami, but car inventory is limited to the total vehicles available in all three locations. Performance Evaluation: At the end of the calendar year, management will evaluate your performance based on the following metrics: Cumulative Profit Final Market Share Capacity Utilization Final Month's Profit Cumulative Unit Sales