Case Study Olympic Rent-A-Car Us

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

Jack Taylor began his business of Enterprise Rent-A-Car in 1962 in St. Louis, Missouri. Following the successfully philosophy of, "Take care of your customers and employees first, and profits will follow", Enterprise grew steadily to become the nation’s largest rent-a-car company. What separated Enterprise from its other competitors such as Hertz, Avis, and Alamo was the fact that the company focused on two segments of the home-city market rather than appealing to the airport-rental market.

Intensity of Competitive Rivalry: The threat of rivalry is relatively low. The movie rental industry is dominated by a few firms, namely Blockbuster, and Movie Gallery (which liquidated all itself in 2010). However they are in competition with other industries such as cable and satellite companies, VOD services and sites like Hulu and Amazon.

Summary: Who: Robin Chase CEO and Co-founderWhen: October 14, 2000What: Option 1: Reach out to other investors Option 2: Create a new business model Option 3: Close the businessMain Players: * Robin Chase * Antje Danielson - * Corporate PresidentOthers * Glenn Urban – Dean and mentor to Chase * JohnSnow – Consulting Firm * Paul Covell – MIT engineer * Investors CircleAlliance Partners: * Dan Holland – Venture partner * Transit Stations * AP reporter – press coverage Competitors: * Europe car sharing companies - Swiss Mobility CarSharing, Drive Stadtauto * Rental Car Companies –

Enterprise Rent-A-Car has started its operations in 1962 by establishing and successfully developing a new niche in the car renting industry. The business had strictly focused on replacing local citizens’ cars due to repairs. Later on Enterprise started to serve two additional segments, leisure & discretionally rentals and business rentals. Newly launched segments were successful; however the main focus of Enterprise continued to be the initial business stream – the Replacement Rentals. This business section takes up 78% of Enterprise’s resources, which enables the company to capture approximately 55% of the US replacement rentals market share. Yet, the total replacement Rent-A-Car

Management should note that the level of activity was above what had been planned for the month. This led to an expected increase in profits of $1,100. However, the individual items on the report should not receive much management attention. The favorable variance for revenue and the unfavorable variances for expenses are entirely caused by the increase in activity.

Therefore, we would only be willing to pay at the most, (27-22) orders worth of rent, which = 5 * (2.00 + 0.70) = $13.50 per day.

Monthly 50% Monthly Rooms $2,956,500 $2,217,375 $1,478,250 Leases $180,000 $135,000 $90,000 TOTAL REVENUE $3,136,500 $2,352,375 $1,568,250 Expences TOTAL VARIABLE COSTS $454,000 $340,500 $227,000 TOTAL FIXED COSTS $1,403,000 $1,403,001 $1,403,002 TOTAL EXPENSE BEFORE IT $1,857,000 $1,743,501 $1,630,002 EBIT

1. The local Mastermind store sells innovative educational toys. Part of their service is giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four more people for 200 hours each at $20 per hour. How much additional revenue does she have earn to the nearest dollar

Total Sales Dollars (for covering each incremental dollar of advertising) = Absolute increase in dollar sales / Advertising expense = $500,000 / $150,000 = $3.33

Springfield Express has an opportunity to obtain a new route that would be traveled 20 times per month. The company believes it can sell seats at $ 175 on the route, but the load factor would be only 60 percent. Fixed cost would increase by $ 250,000 per month for additional personnel, additional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $ 70.

2.) For each expense that is variable with respect to revenue hours, calculate the cost per revenue hour.

In this report, I am going to evaluate the influence of different stakeholders exert at Mercedes Benz. The stakeholders I will be discussing is the owner of the business, customers who buy cars as they provide good quality of service, employees who help the business to perform well and making profits and the Government who support Mercedes Benz because they have been running successfully throughout the years so they want to invest money to further develop the business. On the other hand, I will make the following points in my report is by commenting on the level of influence that each stakeholder exerts on Mercedes Benz. I will also be referring to evidence from different sources for the comments that I make. I will state the strengths and the weaknesses on the influence of different stakeholders. Also, I will make recommendations on how Mercedes Benz can do to overcome the weaknesses which can affect their performance. At the end I will write a conclusion by summarising what I wrote in the report, which stakeholders have the most influence and which stakeholders have the least influence in Mercedes Benz.

Budget and Avis are both subsidiaries of Cendant Corp. who bought both companies separately. Although both Avis and Budget were part of Cendant by the end of the year 2002 they operate as separate companies and maintain distinct brand identities. Avis positions itself as a business-friendly rental car company while Budget tries to own the leisure segment. The two brands together operate over 6,000 outlets in the Americas, Australia, New Zealand and the Caribbean. Each rental car company maintains separate advertising campaigns, websites and counters, while combining some "back office" operations to reduce costs.

Under the original costing system used by Dakota Office Products, Customer A is shown to be slightly less profitable than Customer B. From the calculations above, we see that Customer A is slightly profitable at 0.3% profit as a percent of sales, and Customer B is not profitable, at a loss of (7.1%). We observe that Customer A is a consumer of low-cost services and generally pay their bills within 30 days unlike customer B who took 90 days or more. Timely servicing of debt led to profitability of Customer A.