INESC TEC creates decision support tool for pricing in car rental companies
INESC TEC’s Centre for Industrial Engineering and Management (CEGI) is developing, in partnership with Guerin Car Rental Solutions, a tool that makes it possible to define the pricing of this car rental company in e-broker websites, intermediaries that represent and compare different competitors. This tool makes it possible to update the company’s profit by updating, several times of day, the prices on the e-brokers for each rental type and date searched by the client, based on the monitoring of the fleet occupation and prices of competitors. The project started in February.
07th April 2015
In the car rental business, the cost of fleet dismantling is critical for financial results, and the prices are usually related to the level of occupation, similarly to what happens with plane tickets. However, on the e-brokers, because there is a lot of transparency between competitors, the consumers’ response to the established price also depends greatly on their market position, that is, if the company offers the most affordable rental.
Entitled “Model to support pricing decisions”, INESC TEC’s project will design and implement a system to update the company’s rental prices on e-broker websites. This is a critical process in this sector because of the products’ low differentiation. With this tool, the new prices are calculated with an adaptive heuristic based on the concepts of target utilisation and booking pace adjustment, which responds to the variations in the market price.
The final result will be the integration of the system with the fleet management system, the system that extracts market prices, and the system that communicates with the e-brokers. This will result in a more autonomous process that monitors, optimises and updates the company’s prices several times a day.
In this project, INESC TEC will be responsible for designing the global system and integrating the different systems, for creating the interface that parameterises, manages and controlls the system, for developing the different modules that update the pricing, including the adaptive heuristic, output and indicator generation, and for creating calculation calendars that prioritise the processes that need to be recalculated.
The CEGI team involved in this project is composed of Beatriz Brito Oliveira, José Fernando Oliveira and Maria Antónia Carravilla.
The INESC TEC researchers mentioned in this article are associated with the following partner institution: INESC Porto and FEUP.
INESC TEC, March 2015