At a Florida rental car agency, students assume the role of a district manager responsible for setting prices for rental cars across three Florida cities: Miami, Orlando, and Tampa. Over 12 simulated months, students must analyze price sensitivity between leisure and business travelers and consider strategies that maximize rentals across weekdays and weekends in each city. Demand for rental cars can vary depending on the month and whether the location is more popular with business or leisure travelers. Unrented cars have associated holding costs while running out of cars is lost opportunity for profit. Students can 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. Students benefit from running the simulation multiple times with increasing complexity. This single-player simulation includes three pre-set scenarios or faculty can design custom scenarios to meet specific learning objectives.
The second release of this popular simulation retains the immersive experience of the original while streamlining the information available to students and the debrief tools for faculty.
Company: Harvard Business Publishing
Approximate price: $15.00
Playtime: 2 hours
Learning objectives: Understand the nature and dynamics of consumer response to price (price elasticity). Account for demand differences across customer segments and regions. Understand and plan for seasonal variations in demand. Explore the impact of pricing decisions on firm profitability.
Use pricing strategies to optimize inventory.
Anticipate and understand competitive reactions to pricing decisions.
Understand how price and general economic conditions affect overall market demand.
Link to simulation home page: https://hbsp.harvard.edu/product/7005-HTM-ENG?Ntt=Pricing%20Simulation%3A%20Universal%20Rental%20Car%20V2