Using resource management theory, should Jamie buy or Lease her vehicles, and what are two advantages for this? Jamie r
Posted: Mon May 30, 2022 3:24 pm
Using resource management theory, should Jamie buy or
Lease her vehicles, and what are two advantages for this?
Jamie runs a small car and campervan rental business.
Anticipating an increase in the
number of tourists once the New Zealand borders fully reopen, Jamie
considers
significantly expanding her car and campervan rental business.
Before making such an
important step, she wants to understand the resources required.
Jamie has carefully
studied existing rental car and campervan operators (RCO) and read
several research
papers to estimate the required number of staff, branches, and cars
in her fleet.
She has learned that the demand for rental cars and campervans in
New Zealand is
highly seasonal. Demand increases sharply from Labour Day in late
October and remains
high until Easter in April but stays relatively low throughout the
rest of the year. The
only exception is another spike in demand for rental cars (though
not campervans)
during the winter break and Matariki Festival.
Jamie has also found it curious that other RCOs use different
models to manage their
vehicle fleet. Some choose to lease their vehicles from large
international manufacturers,
such as Toyota or Suzuki. The minimum lease term is six months, and
most RCOs
choose to lease most of their vehicles from October through April
and then return them
to the manufacturer. This means they only keep a very low number of
vehicles for the
rest of the year. Other RCOs choose to purchase all of their
vehicles instead of leasing
them. These companies then use them for several years before
selling them and
purchasing newer vehicles.
As Jamie plans to store more vehicles soon, she contracts KiwiShade
Ltd. to install a
number of new steel carports on a vacant plot she owns. Jamie pays
the full amount of
$52 000 in advance. Jamie informs Kiwishade Ltd. that the car ports
need to be installed
as soon as possible as her current lease for a small garage is
expiring and she needs to
safely store her current rental fleet. Kiwishade Ltd. begins to
install the carports but then
finds a more profitable job and abandons the installation of
Jamie's carports. This means
they have only partly installed the roof panels of the carports.
Jamie does not contract a
new company to complete the work. In the meantime, she starts
storing her existing car
fleet under the semi-completed carports.
A few weeks later MetService issues a heavy rainfall and hail
alert. Several days later the
projected storm rolls through the area and causes heavy hail
damages to two of Jamie's
cars. The repairs have been estimated to cost $5000 and will take a
week to complete.
During this time Jamie will be unable to rent out the vehicles. The
daily rental fee for the
vehicles is $150 each.
Lease her vehicles, and what are two advantages for this?
Jamie runs a small car and campervan rental business.
Anticipating an increase in the
number of tourists once the New Zealand borders fully reopen, Jamie
considers
significantly expanding her car and campervan rental business.
Before making such an
important step, she wants to understand the resources required.
Jamie has carefully
studied existing rental car and campervan operators (RCO) and read
several research
papers to estimate the required number of staff, branches, and cars
in her fleet.
She has learned that the demand for rental cars and campervans in
New Zealand is
highly seasonal. Demand increases sharply from Labour Day in late
October and remains
high until Easter in April but stays relatively low throughout the
rest of the year. The
only exception is another spike in demand for rental cars (though
not campervans)
during the winter break and Matariki Festival.
Jamie has also found it curious that other RCOs use different
models to manage their
vehicle fleet. Some choose to lease their vehicles from large
international manufacturers,
such as Toyota or Suzuki. The minimum lease term is six months, and
most RCOs
choose to lease most of their vehicles from October through April
and then return them
to the manufacturer. This means they only keep a very low number of
vehicles for the
rest of the year. Other RCOs choose to purchase all of their
vehicles instead of leasing
them. These companies then use them for several years before
selling them and
purchasing newer vehicles.
As Jamie plans to store more vehicles soon, she contracts KiwiShade
Ltd. to install a
number of new steel carports on a vacant plot she owns. Jamie pays
the full amount of
$52 000 in advance. Jamie informs Kiwishade Ltd. that the car ports
need to be installed
as soon as possible as her current lease for a small garage is
expiring and she needs to
safely store her current rental fleet. Kiwishade Ltd. begins to
install the carports but then
finds a more profitable job and abandons the installation of
Jamie's carports. This means
they have only partly installed the roof panels of the carports.
Jamie does not contract a
new company to complete the work. In the meantime, she starts
storing her existing car
fleet under the semi-completed carports.
A few weeks later MetService issues a heavy rainfall and hail
alert. Several days later the
projected storm rolls through the area and causes heavy hail
damages to two of Jamie's
cars. The repairs have been estimated to cost $5000 and will take a
week to complete.
During this time Jamie will be unable to rent out the vehicles. The
daily rental fee for the
vehicles is $150 each.