Decision on Transfer Policy for A Car Rental Company in Multi-City Network

In this paper, we propose dynamic programming model for a car rental company in multi-city network to determine the transfer policy in daily operation. In the model, each city faces two types of demand, namely, inter-city and local city demands, where the former refers to a customer pick up a vehicle in one city but return it in another city and the latter refers to a customer rent a vehicle in one city and return it to the original city. Because of inter-city demand, the vehicles in each city may become unbalanced. It is necessary to transfer vehicles among these cities to satisfy the corresponding demand. Though the complexity of this problem, we analyse the transfer strategy and propose an algorithm to achieve the transfer policy.