Dynamic pool segmentation Essay

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Words: 4271
Pages: 18



Dynamic Pool Segmentation Model and
Algorithm in the Car Rental Industry
Yazao Yang
School of Business Administration, South China University of Technology, Guangzhou 510640, China
Email: scutyyz@gmail.com

Wenzhou Jin and Xiaoni Hao
Institute of ITS & Logistics, South China University of Technology, Guangzhou 510640, China
Email: ctwzhjin@scut.edu.cn xnhao@scut.edu.cn

Abstract— Pool segmentation is an essential step in the logistics management process for large-scale car rental business. Its main function involves dynamic decisions about pools clustering and regional logistics management centers selecting, whose goal is to optimize fleet utilization and improve the logistics management efficiency. According to developing mode of car rental enterprises and layout of leasing sites, a three-tier structure is presented to describe the logistics management relations among each leasing sites.
Based on the logistics operation characteristics and practical administration demand, a dynamic model and its algorithm are proposed for pool segmentation in the car rental industry. A case study shows that the proposed methodology is feasible and effective.
Index Terms— heuristic algorithm, pool segmentation, car rental industry

After the development of nearly one century, the revenue of car rental business per year has been up to one hundred billion US dollars, and it has become a significant role for the world economic development. By adopting two common patterns, car rental companies achieve their operation expansion. One is M&A (i.e.,
Merger and Acquisition) that need to input material and human resource; the other is concession that only needs to enhance management and cooperation.
At present, a number of international car rental giant have formed, such as Eurocar, Herz, Avis and so on, at the same time, the automobile rental industry also cultivate a great many local enterprises [1]. Along with the rapid development of the whole industry, leasing operation from remote places is increasing, and the car rental industry gradually unfolds a large-scale and networking trend. Information exchange between customers and leasing sites or site-to-site accomplished mainly by means of e-commerce.
In order to fit the operation mode and the practical requirements of consumption patterns, car rental companies usually maintain advantages in their price, site distributions, vehicle differentiation, management feature
Manuscript received March 20, 2009; revised May 6, 2009, accepted
June 15, 2009.
Corresponding author: Yazao Yang

© 2009 ACADEMY PUBLISHER doi:10.4304/jcp.4.12.1202-1208 and network efficiency, then they can possess stronger environmental adaptability and anti-risk ability, and enhance their market competitiveness and customer satisfaction. An example will help to explain this. Herz has about eight thousand leasing sites in more than one hundred fifty countries around the world, and its feature is short-term car rental for business travel and leisure.
Most of the important field operations are organized on a pool basis. In a pool, a group of leasing sites, each run by its own management, shares a fleet of cars [2]. It is particularly important to discuss the pool segmentation method, because operators usually need to adopt regional management to respond to changes in market demand and to ensure the efficiency of logistics management. In the actual operating process, the whole car rental network is divided into some relatively independent sub-districts, and cars to be leased are distributed to the corresponding rental sites in accordance with changes in market demand throughout the characteristics.
This paper aims at proposing a dynamic model for pool segmentation in the car rental industry, and a heuristic algorithm is given to solve practical problems. The main sections of this