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Article Excerpt
Tourism Holdings Limited (THL), with 14 locations in Australia and New Zealand, operates a fleet of approximately 4,000 recreational rental vehicles of many types. It allocates vehicles to bookings centrally. If demand for a particular vehicle type at a location exceeds supply, THL may substitute vehicles of similar types or relocate vehicles from other locations to the location that needs the vehicles. The static problem that THL faces daily is to determine a vehicle schedule that minimizes the tangible and intangible costs of such substitutions and relocations. The dynamic problem is to determine--sometimes as the customer waits--whether a vehicle will be available to cover a potential booking and to incorporate that booking into the schedule. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) has researched, developed, and supplied software, VASS and D-VASS, to solve the static and dynamic aspects of THL's schedule creation and maintenance. This paper describes the THL problem, the systems that CSIRO implemented, and how THL embedded these systems into its operations.
Key words: rental-scheduling applications; network-flow algorithms; assignment problems; revenue management.
History: This paper was refereed.
Scheduling at THL
Tourism Holdings Limited (THL) is a New-Zealand-based company with revenue in excess of NZ$100 million. It operates a fleet of more than 4,000 recreational vehicles (e.g., motor homes and camper vans) at 10 locations in Australia and four in New Zealand.
THL schedules these rental-vehicle operations centrally, on a day-to-day basis, using two criteria: Can it accept a given booking request? If so, which vehicle should it assign? The reputation, success, and even the company's viability depend on its ability to answer these questions.
Scientists from the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia worked with THL over the past five years to implement systems that can help answer these questions, and to assist THL's scheduling staff to obtain maximum efficiency from its vehicle fleet. This paper describes the business issues facing THL, and the systems CSIRO developed to address these issues.
In operations research terms, THL faced a scheduling problem. It needed to construct a schedule that assigns a suitable vehicle to each accepted booking. We call this the static problem. The question then arises, "Can a given booking be placed into the schedule, and if so, where?" This is the dynamic problem. In the remainder of this section, we give an overview of these two scheduling problems.
We can state the problem as follows. The characteristics of a booking are its start and end date, its start and end location, and the booked product. A product is related to a vehicle type but is more general. For example, a product may specify a four-berth motor home, which covers several different makes and models of vehicles. Products also differ with respect to the periods of hire and insurance conditions.
The main characteristics of a vehicle are its availability dates and its vehicle type. The vehicles include standard four-door saloon cars, four-wheel drive vehicles, and camper vans with two, four, or six berths. If we consider these and other distinguishing features, such as make and model, there are about 50 distinct vehicle types.
To allow the largest set of bookings to be accepted, we consider a large pool of vehicles and use the concepts of substitution and relocation, described below, to maximize the number of available vehicles.
Substitution. The product that a booking specifies maps to one or more suitable vehicle types. Some of the vehicle types are natural matches for the product, while some may be of higher quality or capacity. For example, it is permissible, but not desirable, to substitute a six-berth vehicle for a product that specifies a four-berth vehicle. A substitution cost table assigns costs to each combination of vehicle type and product.
Relocation. A relocation involves shifting a vehicle from one location to another to meet demand. A relocation table specifies the consequent costs for each vehicle type and each possible pair of locations between which relocations can be made. For a given vehicle and pair of locations, there may be several relocation scenarios that have different durations and cost. For example, two drivers might relocate a vehicle nonstop at high cost, or a single driver might perform the relocation more economically but more slowly, or the company might offer the relocation task to backpackers at nominal cost.
Other costs associated with scheduling of the rental fleet include the following.
Turnaround Cost. When a customer returns a vehicle to a THL depot, THL cleans it and makes it ready for the next booking. An allowance of one day is standard for this process; however, a faster turnaround is possible, at an additional cost.
Usage Cost. Because of higher maintenance costs, customers prefer some...
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