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Assume that you are currently profitable, but you hear rumors that your corporate parent is experiencing financial trouble. You started this role 3 months ago and have been winning awards for customer satisfaction. One of the key measurements is how long customers wait for a car. Your market study shows that customers will continue to provide superior feedback on satisfaction as long as they do not wait more than 30 minutes for the car of their choice. Conversely, they will give poor feedback if they wait over an hour.

Each vehicle costs $10,000 per year to maintain in the fleet, considering depreciation, maintenance, and amortized purchase price. Corporate leadership has clearly stated that they need at least $500,000 per year more profit to remain viable, and they have asked you to help identify savings. More savings could lead to a promotion, but only if you maintain customer satisfaction levels.

Required:
a. Lay out a plan that saves the company at least $500,000 while maintaining customer satisfaction levels in the coming year.
b. What is the very best you can do to keep wait times under an hour? Aside from changing the number of vehicles, what else would you do to impact performance?

Answer :

a. To save the company at least $500,000 while maintaining customer satisfaction levels, a possible plan could be to analyze the usage patterns of the fleet and optimize it accordingly. This could involve:

Identifying the most and least popular cars in the fleet: By analyzing the usage data, we can determine which cars are most popular and which ones are not used as often. We can then reduce the number of unpopular cars in the fleet and replace them with more popular ones.

Reducing the number of cars in the fleet: By reducing the number of cars in the fleet, we can save on the costs of depreciation, maintenance, and purchase price. However, this needs to be done carefully so that we do not impact customer satisfaction levels.

Implementing a car-sharing system: Instead of assigning a specific car to each customer, we could implement a car-sharing system where customers can choose from a pool of cars. This would reduce the number of cars needed in the fleet and save on costs.

Optimizing the maintenance schedule: By optimizing the maintenance schedule, we can reduce the costs associated with maintenance and ensure that the cars are always in good condition.

b. To keep wait times under an hour while also maximizing savings, we could consider implementing dynamic pricing. By charging higher prices for cars that are in high demand and lower prices for cars that are in low demand, we can incentivize customers to choose less popular cars and reduce wait times. Additionally, we could implement a reservation system where customers can reserve a car in advance, which would reduce wait times and increase customer satisfaction levels. Another strategy could be to implement a loyalty program where customers who frequently use the service can get discounts or other rewards, which would incentivize them to continue using the service and reduce customer churn.

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