The airport branch of a car rental company maintains a fleet of 50 SUVs. The interarrival time between requests for an SUV is 2.4 hours with a standard deviation of 2.4 hours. Assume that, if all SUVs are rented, customers are willing to wait until an SUV is available. An SUV is rented, on average for 3 days, with a standard deviation of 1 day.
1)What is the average number of SUVs in the company lot?
2)What is the average time a customer has to wait to rent an SUV?
3)The company discovers that if it reduces its daily $80 rental price by $25, the average demand would increase to 12 rentals per day and the average rental duration will become 4 days. Should they go for it?
4)How would the waiting time change if the company decides to limit all SUV rentals to exactly 4 days? Assume that if such a restriction is imposed, the average interarrival time will increase to 3 hours as will the std deviation.