RM Tips and Strategy

An estimated fleet plan is better than no fleet information at all.

Emmanuel Scuto
June 24, 2017
Fleet optimization: Even though new car purchase orders are not issued yet, it is essential to load your estimated fleet-level in the system to feed your demand analytics.

Fleet optimization : Even though new car purchase orders are not issued yet, it is essential to load your estimated infleet level in the system to feed your demand analytics.

The yield management goal is to optimize simultaneously the demand in regards to the available supply. Thus it is essential to control these two indicators. But, one of the characteristics of the car rental industry is the possibility given to play on the demand with a flexible capacity. However, with enough time ahead, it would be possible to reduce the uncertainty of fleet variances between high and low seasons.

Forecast tools are generally pretty efficient to measure expected demand over a medium or long-term horizon. But, there is few or no tool available to forecast future available fleet.

If there is no information about future capacity loaded into the system, the Yield can hardly estimate the level of the future fleet that may be available.

In some cases, buy-back defleeting dates are loaded only in the financial module of the operating system to compute the depreciation value. But this would be a very useful information to feed the yield module. Fleet negotiation is often the domain reserved of the CEO and unfortunately, information about infleeting and defleeting are not shared among all team members or a bit too late, when the delivery dates of new cars are known.

It is a bit frustrating in the Yield perspective while WeYield noticed a clear improvement in the capacity management with more flexibility given to the stock to match expected demand. Car manufacturers and intermediaries are committed to easing car rental companies' conditions to face their day-to-day constraints.

So, it is pretty rare to have independent car rental operators loading their system with an estimated capacity plan for the future until the purchase orders are signed generating a lack of visibility on future fleet capacity. And no algorithm is able to optimize an unknown capacity. So it is important to feed the system with rough instead of nothing.

However, most of the operating systems (like Wheels from InvensysRentWay from JimpySoft, or Cars+ form Thermeon) are configured to let the business analyst input rough number of cars that are planned to be bought. Usually figures like [+50 EBMR as of 1st of Oct 2016] or [-30 EBMR as of 31st of May 2017] are enough to feed optimization tools.

CocktailRM, the revenue piloting system powered by WeYield, retrieves these future data along the last year's actual fleet fluctuation to improve the demand piloting. To go even further, challenging demand and fleet computation with more and more precise information, it is possible to fine-tune the future fleet plan with more useful data given to the Fleet Manager or the CEO.

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Emmanuel Scuto
June 24, 2017

Expert in Revenue Management and Pricing in the Car Rental industry for 20 years, I aim to share my optimization experience with our customers throughout the world. I am specialized in revenue maximization, pricing strategy, yield management, reporting based on AI.

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