• Seminar: Revenue Management in the Car Rental Industry - A case study of AVIS Budget EMEA

Seminar: Revenue Management in the Car Rental Industry - A case study of AVIS Budget EMEA

Time: 1:30-2:30PM, Tuesday, 2nd April 2013

Venue: Building 4, BA305

Presenter: Dr Dong Li (University of York, United Kingdom)

Abstract:
Avis Budget EMEA is a leading car rental company in Europe, Middle East and Africa. Over the last few years the company have invested considerable resources in the bespoke design and development of a Revenue Management (RM) Forecasting and Optimisation system to allow Avis to maximise the revenue generated by its fleet of vehicles. Future customer bookings are forecasted using an exponential smoothing method, with consideration of no-show rate, cancellation probability, and seasonality. They are then, along with the available fleet of vehicles, passed over to an optimiser to maximize revenue, while taking into account a large number of operational and business rules. The optimisation problem is formulated as a mixed-integer program with demand deemed as deterministic. If demand uncertainty is incorporated, the problem becomes a probabilistic nonlinear program, which is not trivial to solve. In light of this, the expectation is approximated by a set of linear inequalities in order to reduce the non-linear problem to a mixed-integer program to which the standard Branch and Bound algorithms apply. The main decisions from the optimisation are two levers which control both the supply and demand. One is the product availability control to save fleet for more profitable customers. The other is to shuttle cars between rental stations.

Brief biography of the presenter:
Dr Dong Li is a Lecturer in Operations Management in the York Management School, University of York, United Kingdom. Before taking this post he worked at Avis Budget EMEA as an Operational Research analyst, responsible for the development and implementation of forecasting and mathematical programming algorithms to solve revenue management problems in the car rental industry. He has also worked a few years for Intel Corporation (Shanghai) on production planning and scheduling of the semi-conductor manufacturing. He obtained a PhD in Management Science from Lancaster University, United Kingdom. During his doctoral studies, Dr Dong Li worked on Approximate Dynamic Programming (ADP) and its application in dynamic resource allocation problems. One of his major contributions was an innovative ADP algorithm which rests on a fluid approximation to the stochastic system. He won the Kingsman prize from Lancaster University in 2011 as the best doctoral researcher, and the Operational Research Society PhD prize Runners-up for the best PhD dissertation 2011 in the UK. He holds an MEng in Industrial & Systems Engineering from National University of Singapore, and an MEng and a BEng in Mechanical Engineering from Xi'an Jiaotong University, China.