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CASE STUDY Rent-a-Car is one of the two car rental agencies serving a small regional airport in the U. Midwest.
CASE STUDYRent-a-Car is one of the two car rental agencies serving a small regional airport in the U.S. Midwest. Forty percent of its customers are airline passengers and the remaining sixty percent are dwellers of the nearby college town who use rental cars for business and leisure trips. The airport is within two miles from campus and approximately six miles from the city center. It is easy to reach by car, taxi, or city bus.You are a manager of Rent-a-Car. Your fleet consists of 72 cars, of which 47 fall into the ‘economy’ class and 25 in the ‘luxury’ class. Whenever demand for cars in some class exceeds the number of cars available, additional vehicles can be delivered from the nearest company hub in the state capital located 70 miles away. Alternatively, some customers unable to rent an economy-class car may be upgraded to a luxury-class car at no extra cost to them.Your only competitor at this location has a more sophisticated system of car category tiers, which consist of Compact, Economy, Mid-size, and Large cars. AssignmentIn order to better understand your unit’s operating environment, you are asked to provide your estimate of the demand equation that would account for various factors that affect your customer traffic. This will be done by using regression techniques. Estimating the demand equation is useful for future analysis of your unit performance.You need to request the data for your empirical study. Specifically, (1)What are you planning to use as the dependent variable in your regression? What units of measurement for that variable are you going to adopt? (2) What other data would you need and can realistically get? You may request information about up to five independent variables.For each variable you request, provide reasons why you expect it to be important for your analysis and explain the expected sign of the relationship between the proposed independent variable and the dependent one.
