Group Homework 2.docx - GROUP HOMEWORK 2 a b c d e The...

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G ROUP H OMEWORK 2 The airport branch of a car rental company maintains a fleet of 50 SUVs. The inter- arrival time between requests for an SUV is 2.4 hours, on average, with a standard deviation of 2.4 hours. There is no indication of a systematic arrival pattern over the course of the day. Assume that, if all SUVs are rented, customers are willing to wait until there is an available SUV. An SUV is rented, on average, for 3 days, with a standard deviation of 1 day. a. What is the average number of SUVs parked in the company’s lot? b. Through marketing survey, the company has discovered that if it reduces its daily rental price of $80 by $25, the average demand would increase to 12 rental requests per day and the average rental duration will become 4 days. Is this price decrease warranted? Provide an analysis. c. What is the average time a customer has to wait to rent a SUV? Please use the initial parameters rather than the information in (b) for this case and the rest of the question. d. How would the waiting time change if the firm decides to limit the SUV rentals to exactly 4 days?
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