Simulation | 2008

Pricing Simulation: Universal Car Rental

by John T. Gourville

Abstract

This web-based simulation presents an engaging context in which students develop their knowledge of pricing by managing a rental car operation (Universal) in Florida and improve regional performance by developing a pricing strategy. The simulation involves three regions--Orlando, Tampa, and Miami--which vary in size, market dynamics, and customer mix. The focus is competition between two car rental companies with players inputting decisions for Universal. The simulation lasts up to 12 simulated months. Whether assigned as individuals or teams, players must set weekday and weekend prices for each region for each period (month) and make fleet capacity decisions at several points throughout the simulation. The simulation is asynchronous and can be assigned for homework. A Facilitator's Guide provides an overview of simulation screens as well as a Teaching Note with detailed commentary on debriefing the simulation. The simulation can be assigned and used in different ways to meet the needs of the instructor. For example, it can be assigned as a pre-class exercise with subsequent in-class debrief. Alternatively, given the range of variables at the professor's disposal, the professor can craft weekly assignments throughout the course which highlight specific learning objectives. Finally, the simulation can be run multiple times, with increasing complexity. Computer with minimum 1024x768 screen resolution, High speed internet connection (DSL / cable modem quality), Windows 2000, XP, or Vista / Macintosh operating systems, Internet Explorer 6+ / Firefox 2.0+ web browser with javascript and cookies enabled, Flash Player 9+ browser plug-in (Users with earlier versions of Flash will be notified automatically and given the option to upgrade. This is a free browser plug-in.), Microsoft Excel (optional).

Keywords: Competition; Consumer Behavior; Price; Profit; Renting or Rental; Auto Industry; Service Industry; Miami; Orlando; Tampa;

Citation:

Gourville, John T. "Pricing Simulation: Universal Car Rental." Simulation and Teaching Note. Harvard Business School Publishing, 2008. Electronic.