A case study to understand probability, randomness and uncertainty in a business setting.

What is it about?

The central theme of the case on a car rental service is to compute the average profitability in the context of limited fleet size, uncertainty related to number and type of customer requests, and variability in the utilization of vehicles. In addition, the case provides an opportunity to discuss situations like negotiating wages, outsourcing vehicles on a need basis, and subscribing capacity to an integrator (an online platform linking the supply and the demand sides)

Featured Image

Photo by Patricia Jekki on Unsplash

Photo by Patricia Jekki on Unsplash

Why is it important?

The case helps students apply different concepts in probability (including random variables and expected value) to analyze a real-life managerial situation. When resolved appropriately, it demonstrates the power of simple probabilistic tools in addressing managerial challenges. The case is amenable for a simulation based analysis to study the interplay between demand variability (quantity and mix) and economic consequences in multiple scenarios.

Perspectives