Reference no: EM132567474

Scenario

Cheapest Car Rental rents cars at the Chicago airport. It has two market segments. Short term rents for an average time of 0.5 weeks, with an average of 200 cars rented Medium term renting for an average of 2 weeks, with an average of 100 cars rented Approximately 10% of short term rental cars need a repair when returned Approximately 30% of medium term rental cars need a repair when returned The remaining cars only need cleaning and refueling and they are available to rent again Cars needing repair are sent to the shop, the entire process until return takes 2 weeks. Assume repaired cars are immediately sent to be cleaned and then returned to service. Cleaning and fueling cars is done immediately with no delay. Assume cars are rented as soon as they are cleaned and / or repaired Repairs cost $300 per car Cleaning costs $5 per car Short term renters pay $100 per week Medium-term renters pay $120 per week

Question 1: Draw the process flow diagram of this process, calculating I, R and T for each of activities specified above

Question 2: What is the average flow time of a medium-term renter?

Question 3: What is the average contribution of a car that is rented for a medium term (i.e., Sales Revenue - Operating Cost)