caim assignment

8/3/2019 CAIM Assignment

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TRUCK RENTAL

PRICING APPLICATION

SUPPLY CHAIN SOLUTION LTD


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Table of Contents

1 Introduction ................................................................................................................................3

2 Requirements ..............................................................................................................................4

2.1 Operating system ................................................................................................................................. 42.2 Technologies ......................................................................................................................................... 42.3 Hardware .............................................................................................................................................. 42.4 Software ................................................................................................................................................. 5

3. Scope of the Application ..........................................................................................................6

4. Technologies/Tools Used ........................................................................................................7

4.1 Pro*C ...................................................................................................................................................... 74.2 Toad ....................................................................................................................................................... 74.3 Unix shell scripting ............................................................................................................................. 74.4 Autosys .................................................................................................................................................. 84.5 SAS ......................................................................................................................................................... 84.6 Fortran....8

5. Overview of Pricing applications ...........................................................................................9

5.1 LPSS (Local pricing support system) ................................................................................................ 95.2 DP2 (Directional pricing) .................................................................................................................... 95.3 YM (Yield Management) ................................................................................................................... 10


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1.Introduction

Truck Rental Pricing Application is used to derive rates for renting trucks and otheraccessories like Two Dolly etc.

Pricing is done to acquire the maximum possible market share at best price. It is basicallydone for Local and One-way rentals. Within fleet of 15 truck types, rates are not provided forall truck types and separately not for every dealer location but they are provided for few trucktypes and applied to all.

Pricing goals include

Provide best price in the market with an aim to acquire maximum market share. Generate maximum revenue, enhancing the sale of insurance provided by BTR. Transferring trucks to another region, if a truck would generate more revenue at that

location.

To turn down the truck, if it is not making money. Drive up the demand as and when required. Price break-up types

-Local-One-way

Consumer types-Residential-Commercial


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2.Requirements

2.1 Operating System:

Scenario Required Operating System

Client Any Windows family (Windows 95 and up)

Server UNIX Operating System, SunOS 5.8

2.2 Technologies Used:

The following technologies & tools are being used in Pricing applications:

Oracle 10g database Unix Shell scripting Pro*C / C Fortran SAS Power Builder 6.0 Autosys VB (Visual Basic) Toad 7.1.7.1 Citrix Metaframe Client

2.3 Hardware:

Scenario Component Requirement

Client Memory 256 MB of RAM

Space 800MB Free Space

Server Memory 256 MB of RAM

Space 3 GB Free Space


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2.4 Software:

Scenario Required Software/Tools

Client Oracle9i Client Toad 7.1.7.1 Power Builder 6.0 Citrix Metaframe Client

Server ORACLE 10g Sun Studio 10 Sun C 5.7 Sun Fortran 95 8.1


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3.Scope of Application

Pricing application is developed to generate and maintain rates of trucks for BTR.

It generates and maintains following information related to prices of trucks.

Local Pricing: Rates related to local rental (where the origin and destination dealer issame).

OneWay Pricing: Rates related to One Way rental (where the origin and destinationdealers are different).

Discounts: Rates related to some special discounts on particular lanes and forparticular dates. Special Events: Information regarding some Local Pricing special events and rates

applicable on those special events.

Competitor rates: Information regarding competitor rates for the trucks and for all thepossible lanes.

Calenderization: Based on the usage & demand of trucks during any calendar monthCalendarization enables to either increase or decrease price from the base price.


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4.Technologies/Tools Used

Various tools and technologies are used while working with Pricing applications. Some of

them are briefly described below:

4.1 Pro*C:

Embedded SQL is a method of combining the computing power of a high-level language like

C/C++ and the database manipulation capabilities of SQL. It allows you to execute any SQL

statement from an application program. Oracle's embedded SQL environment is called

Pro*C.

In Pricing applications Pro*C programs are used to accomplish various business requirements

and interacts with the database through extraction programs or other data manipulation

statements.

4.2 TOAD:

Toad for Oracle is the product that almost all other Oracle Development and Administration

tools are compared against. The product began life in 1995 and essentially pioneered the

category of Oracle Development tools.

Toad is also one of few database development and administration tools that have expanded

to include support for various database technologies. The range now includes Toad for

Oracle, Toad for SQL Server, Toad for MySQL and Toad for DB2. With an increasing

number of organizations employing a blend of database technologies the practicalities of

having an application suite that provides DBAs and Developers with a consistent interface

across all platforms is particularly attractive.

4.3 Unix Shell Scripting:

A shell script is a script written for the shell, or command line interpreter, of an operatingsystem. It is often considered a simple domain-specific programming language. Typicaloperations performed by shell scripts include file manipulation, program execution, andprinting text.

In Pricing application context mostly all the jobs are developed in shell scripts and throughthese shell scripts other programs such as SAS programs, Pro*C programs or Fortran

programs are called which further interact with database or various flat files.


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4.4 Autosys:

Autosys is a product from Platinum; it is a job scheduling software. Basic job scheduling isdone using UNIX - Cron. Cron is time based, i.e jobs are executed based on their scheduled

time. However, in real business, you need to fire jobs not just based on scheduled time, but

also based on events (like an arrival of a file), and, based on the success or failure of other

jobs. Autosys is a total job scheduling solution that allows you to define these events,

dependencies, time schedules, alerts, etc. making it a complete data center automation tool.

In pricing application context Autosys is used to schedule and run various daily jobs used by

pricing applications.

4.5 SAS:

SAS System is a computer program for entering and analyzing data. However, it is much

more than just a program for 'doing' Analysis of Variance. SAS can be used for entering data,

storing and manipulating data much like a spreadsheet program, using SAS/CALC. SAS can

read in data from common spreadsheets and databases, output the results of statistical

analysis in tables, graphs, in Rich Text Format (.rtf) [for input to Word], in Portable

Document Format (.pdf) [for reading with Adobe Acrobat Reader] and in HTML format (for

directly publishing on the 'Web') and much more.

In the application sas files are run through sas_sh by sending the .sas file as parameter

which contains input and output files and the references to them, which are used in the sas

program called from this file.(path for sas file usr/ym2tst/sas10/ )

Example:

Reference file type/the actual file

filename dp451d06 "&filein/DP451D06.OW";

4.6 Fortran:

Fortran is a general-purpose, procedural, imperative programming language that is especially

suited to numeric computation and scientific computing. Originally developed by IBM, It is

one of the most popular languages in the area of High-performance computing. In the

application it is used to format data. Both input and output files are specified in the .unt file

passed as parameter to it, this file also contains the reference numbers assigned to input and

output files which are used to access these inside the fortran program for read and write

operations. (path for a .unt file usr/ym2tst/data/OLD/19--/ )


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5.Overview of Pricing Applications

5.1 LPSS (Local pricing support system):

The Local Pricing Support System application provides a local pricing analyst the capability

to review, approve, and override rate recommendations generated by LPSS at the Local

Pricing Matrix and Team levels. At the end of each day, all approved rate recommendations

are transmitted to the Reservation Systems. This application also allows the analyst to

maintain and control some of the vital data used in generating rate recommendations such as

base rates and days left grids.

There are also other maintenance features that allow the analyst to control some of the

recommendation throttles such as minimum and maximum rates and thresholds controlling

the automatic approval of rate recommendations. Finally, there are features that aid in the

approval of rate recommendations and the setting of recommendation thresholds such as

Market Statistics and Outside Min/Max Rates.

Upon startup of the application, a login screen is displayed where the user can enter user id

and password. After the user successfully logs onto LPSS, the application automaticallydisplays the Recommended Rate window with the Option tab in the foreground. From this

point the user can choose to work with the Recommended Rate window, reviewing,

approving and overriding recommended rates. The user can also choose to work with any of

the other features such as maintaining base grids or reviewing which rate recommendations

exceeded the minimum and maximum rate thresholds.

5.2 DP2 (Directional pricing):

The main functionality of DP2 system is to maintain parameters used for pricing thefollowing products:

Trucks: Vehicles rented by customers for the purpose of moving. Trucks arecategorized into 5 different types identified by their length i.e 10, 15, 16, 20 and

24.

Protection products: Damage Waivers and types of coverage that a customer can takewith the rental.

Accessories: Additional articles used in the move. Eg. Hand trucks, furniture pads,etc.

Towing equipment: Equipment used for towing automobiles behind the rented truck.


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DP2 only handles pricing for One Way rentals, i.e. the rental form where the truck isreturned to a different dealer then where it was picked up from.

Pricing is based on a geographical area called a Matrix which typically is of the size of acity. Matrices are ordered in a hierarchy containing State Areas, States andCorporations. Individual dealers are associated with one (and only one) matrix but all

pricing is performed on the matrix level i.e. the price for a rental from a certain dealer to anydealer in another matrix will be the same.

In technical and storage terms, each matrix in the system is associated with 1 (and only 1) R-schedule. The schedule holds product usage lines, each of them contain fields (columns)

that can be changed and can be described as:

The product type abbreviation: TR for Truck, TD for Tow Dolly, etc. The specific rate schedule based on which the cost of this product will be calculated.

Schedules are used to calculate the rate for each product type except trucks. Truckrates are calculated by Yield Management.

The following cost schedules are used:- F-schedule based on a fixed rate by matrix (e.g. 12$ for matrix A3104),

typically used for accessories like furniture pads.- D-schedule based on a fixed rate by length of rental (e.g. $10 for 2 days, $30

for 6 days), typically used for Personal Accident/Injury and Cargo (PAI Cargo,PAC CCO), which is a protection product.

- X-schedule based on fixed rate by mileage segment (e.g. up to 80 miles: 180$,up to 280 miles: $40), typically used for towing products.

5.3 YM (Yield Management):

Six mathematical models comprise the YM system: Yield Management

Demand Model

Supply Model

Value Model

Competitor Model

Pricing Model

Transfer Model

Demand Model (Forecast)

The Demand Model consists of programs that are used to forecast expected traffic(or

demand) for one-way moves, local moves, and transfers. The forecasts are calculated usinghistorical contract data for each truck size, origin and destination pair, and move duration.


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Forecasting is performed in stages to achieve the best possible accuracy. Forecasts are

developed at the quarterly, monthly, and daily levels and then combined to produce the final

forecast. The final demand forecast is then adjusted based upon reservation data to produce a

more accurate forecast.

Supply Model (Forecast)

The Supply Model uses the results of the Demand Forecast and the inventory information

from the CDR (Central Data Repository) to calculate future truck supply. Truck supply is

calculated by truck size for each matrix and each forecasted day of a 4-week forecast. The

calculation takes into account the following information:

Forecast for local moves, one-way moves, and transfers Move duration Starting on-lot inventory Inventory due-in in each matrix

Next, the model calculates three supply figures for each matrix: Standard, Standard Net, and

Conservative Net Supply. Each figure varies only in the conservativeness of its estimates of

available future supply.

Value Model

The Value Model calculates the value of small and large trucks in each market for the

forecast period (28 days). This model uses the results of the Demand and Supply models

along with cost and price information to calculate the value of a truck in each matrix. The

value of a truck on any given day is the total value of all future local, one-way, and/or

transfer moves.

Competitor Model

The Competitor model downloads survey data from Directional Pricing and incorporates the

data into the YM database for use in the pricing model.

Pricing Model

The Pricing Model determines truck prices for one-way rentals. The price calculations are

made using all relevant market information, such as demand, supply, value, costs, and


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competitor rates. The pricing model first determines whether to reprice a lane (for a given

size) based on a number of different rules. Flagged lanes are repriced using various heuristics

that consider the inventory levels, values, costs, and other parameters supplied by the revenue

managers.

Transfer Model

The Transfer model recommends moving rental trucks to locations with the greatest demand,

to maximize revenues. The model proposes transfers between locations only if the value

generated by the move exceeds the transfer cost. The Transfer model uses the results of the

Demand, Supply, and Value models along with constraints supplied by the revenuemanagers. These constraints include limits on the number of trucks that can be transferred

between matrices, or budgetary or cost limitations.

Calendar Model

The Calendar model allows the users to setup calendarization in YM to be sent to Directional

Pricing and later to the reservation applications. There are complicated algorithms in the

calendar model, it merely takes user parameters and applies them across any hierarchy.

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