APPLICATION CASE W2.1.1
Part 1: The Intelligence Phase
ONLINE FILE W2.1
THE MMS RUNNING CASE
MMS Rent-a-Car, based in Atlanta, Georgia, has outlets at major airports and cities throughout North America. Founded by CEO Elena Markum several years ago, it has seen fast growth over the past few years, mainly because it offers quality service, fast, at convenient locations. MMS is highly competitive, able to offer cars at slightly lower rates than its competitors because most of its airport facilities are located near but not at the airport. A keen user of information systems, MMS tracks competitors’ prices, stored in a large data warehouse, through its Web-based enterprise information system portal, CLAUDIA (Come Learn About statUs for Deals and Information on Autos). CLAUDIA also tracks sales, fleet status, other internal status information, and external information about the economy and its relevant components. CLAUDIA has been a great success in keeping MMS competitive.
The First Meeting
Elena calls the meeting to order: ELENA: Thank you all for coming on such short notice. I’m glad that we could schedule this meeting through our new scheduling module of CLAUDIA. I know you have all read my e-mail about our latest problem—sales are off by 10 percent. Basically, this will put us in the red for the year if it continues for another 4 months. CLAUDIA’s forecasting system that links to our RMS (revenue management system) indicates that sales will continue to decrease for the next 4 months, even after we adjust prices. Folks, what’s going on? I want to know what has caused this problem, how we can fix it, and how we can prevent it from happening again. Aside from solving the problem, I want to develop some knowledge about it and use it as an opportunity to improve our business. MARLA: Frankly, Elena, I don’t understand it! I noticed a slight dip in sales 2 months ago but was so busy with our new fleet acquisitions that I planned to go back and look into what happened when I finished replacing the fleet later this week. I should have passed word on to our analysts to have a look back then. Sorry. ELENA: No problem, Marla. I should have noticed it myself. I’m glad you were at least aware and ready to move on it. So, we have evidence of a problem. What else do we have? S HARON : My up-to-date reports from the travel industry indicate that over the past 6 months there has been a slight increase in business
Elena has called a meeting of her vice presidents to discuss a problem that she noticed yesterday while tapping into CLAUDIA. Rentals are off about 10 percent nationally from the MMS projections for last month. Furthermore, CLAUDIA’s forecasts indicate that they will continue to decrease. Elena wants to know why. This morning, the following VPs are present: Sharon Goldman, Marketing (CMO) Michael Lee, Operations (COO) Marla Dana, Fleet Acquisitions (CFAO) Tonia van de Stam, Information Systems (CIO) Mark Lams, Knowledge Systems (CKO) Jelene Thompson, Accounting (CAO) Rose Franklin, Finance (CFO)
Part II • Computerized Decision Support
overall. More people are flying for business meetings, conventions, trade shows, and pleasure. And the same proportion of them is renting cars in North America. This is true for all of our primary markets—major cities and airports—but not for our secondary markets in the smaller cities, where most rentals are for business. Overall, business should be up. Vacation business is up quite a bit from the central Florida theme parks advertising specials and major conventions. Both political party conventions were held in major cities. Data indicate that our rentals did not increase while the total market did. Our earlier forecasts indicated that business should have increased; our rental rates reflect this, as does our increased...