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Revenue Management Saves National Car Rental

Author

Listed:
  • M. K. Geraghty

    (2188 Deep Woods Way, Marietta, Georgia 30062)

  • Ernest Johnson

    (National Car Rental, 7700 France Avenue, Bloomington, Minnesota 55435)

Abstract

In 1993, National Car Rental faced liquidation. General Motors Corporation (National's parent) took a $744 million charge against earnings related to its ownership of National Car Rental Systems. National faced liquidation, with the loss of 7,500 jobs, unless it could show a profit in the short term. National initiated a comprehensive revenue management program whose core is a suite of analytic models developed to manage capacity, pricing, and reservation. As it improved management of these functions, National dramatically increased its revenue. The initial implementation in July 1993 produced immediate results and returned National Car Rental to profitability. In July 1994, National implemented a state-of-the-art revenue management system, improving revenues by $56 million in the first year. In April 1995, General Motors sold National Car Rental Systems for an estimated $1.2 billion.

Suggested Citation

  • M. K. Geraghty & Ernest Johnson, 1997. "Revenue Management Saves National Car Rental," Interfaces, INFORMS, vol. 27(1), pages 107-127, February.
    • Handle: RePEc:inm:orinte:v:27:y:1997:i:1:p:107-127
    DOI: 10.1287/inte.27.1.107
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