Avis 2006 Annual Report Download - page 14

Table of Contents
We also use data supplied from the Wizard System and airline reservation systems in certain proprietary information management systems to
maintain centralized control of major business processes such as fleet acquisition and logistics, sales to corporate accounts and determination of
rental rates. The principal components of the systems we employ include:
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interactive interfaces through third party computerized reservation systems such as Galileo and Sabre;
• “Avis Interactive”, which allows select corporate clients to easily view and analyze their rental activity via the Internet through
account analysis and activity reports, allowing these clients to better manage their travel budgets and monitor employee compliance
with applicable travel policies;
• “Direct Connect”, a service offered to business to business partners that allows them to easily connect their electronic systems to the
Wizard System, for either brand, and to obtain rate, location and fleet information as well as book reservations for their customers;
and
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operations management programs that, among other things, enable field personnel to manage which vehicles will be rented next.
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Fleet planning model
. We have created a comprehensive decision tool to develop fleet plans and schedules for the acquisition and
disposition of our fleet, along with fleet age, mix, mileage and cost reports based upon these plans and schedules. This tool allows
management to monitor and change fleet volume and composition on a daily basis and to optimize our fleet plan based on estimated
business levels and available repurchase and guaranteed depreciation programs.
• Yield management . We have created a yield management system which is designed to enhance profits by providing greater control
of vehicle availability and rate availability changes at our rental locations. The system monitors and forecasts supply and demand to
support our efforts to optimize volume and rate at each location. Integrated into this yield management system is a fleet distribution
module that takes into consideration the costs as well as the potential benefits associated with distributing vehicles to various rental
locations within a geographic area to accommodate rental demand at these locations. The fleet distribution module makes specific
recommendations for movement of vehicles between locations.
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Pricing decision support system
. Pricing in the vehicle rental industry is highly competitive and complex. To improve our ability to
respond to rental rate changes in the marketplace, we have developed sophisticated systems to gather and report competitive industry
rental rate changes every day. The system, using data from third party reservation systems as its source of information, automatically
scans rate movements and reports significant changes to a staff of pricing analysts for evaluation. The system greatly enhances our
ability to gather and respond to rate changes in the marketplace.
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Business mix model
. We have developed a strategic planning model to evaluate the discrete segments of our business relative to
each other. The model considers revenue and costs to determine the potential margin contribution of each discrete segment. The
model develops business mix and fleet optimization recommendations by using data from our financial systems, the Wizard System
and the fleet and revenue management systems along with management
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s objectives and targets.
• Customer profitability model . We have developed a sophisticated model which analyzes a corporate customer’s rental pattern to
estimate the fleet costs, operations costs and division overhead expenses associated with that customer’s vehicle rentals. We use this
profitability model to determine the financial merit of individual corporate contracts.
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Enterprise data warehouse
. We have developed a sophisticated and comprehensive electronic data storage and retrieval system
which retains information related to various aspects of our business. This