Reference no: EM132299687

The new manager of Hervis Rent-a-Car (Hervis operates in 10 different cities, with a total of 1000 cars) has to decide every week how to relocate its car fleet between the different cities where there is an office of the firm. At the end of the week, some stores have a shortage of cars, while in others there is a surplus. Weekly demand does not change, but the number of cars at the end of the week changes, due to the random behavior of the customers that go from one city to another. The last manager used the following method for re-assigning cars: Start from the west coast, and keep covering shortage with the surplus of the closest cities. But the new manager thinks that a model can be build to tackle the problem more optimally. At the end of each week the shortage or surplus in each city is known, together with the number of cars need at the beginning of each week. The cost of relocating a car from one city to another is also known. Formulate the problem as a linear program, defining the indexes, parameters and variables.