On determiningoptimalfleetsizeandvehicletransferpolicyforacarrentalcompany

This paperconsidershowtodeterminetheoptimalfleetsizeandvehicletransferpolicyforarental-car company thatservestwocities.Ineachcity,therearesingle-tripandround-tripcustomers,wherethe former isgivenahigherpriority.Becauseofthesingle-triptraffic,thenumberofcarsatthesetwocities may becomeunbalanced.Hence,thecentralplannerineachdayneedstodecidewhethertotransfer any carsfromonecitytotheother.Wedevelopatwo-stagedynamicprogrammingmodel,inwhichwe determine thevehicletransferpolicyinthesecondstageandtheoptimalfleetsizeinthefirststage. Although theobjectivefunctioncouldbeneitherconcavenorquasi-concaveduetolostsales,wecan find theoptimalfleetsizeandvehicletransferpolicybysolvingaseriesoflinearprogrammingproblems. We proposeaheuristicsolution,whichisbasedonaspecialcaseanalysis,forthefleetsizeproblem.A numerical studyrevealsthatourheuristicsolutionforthefleetsizeperformswell.However,ifthecor- responding vehicletransferpolicyisnotappropriate,theoverallperformancecandrasticallydeteriorate even withtheoptimalfleetsize.Severalextensionsofourbasicmodelarealsoanalyzed.