Final answer:
Zipcar's pricing strategy includes a $300 security deposit, a $300 annual fee, and usage-based fees, which must account for maintenance costs distributed exponentially with a mean of $150. This statistical information informs their pricing model to cover costs and risks while ensuring the service remains affordable and the company stays profitable.
Step-by-step explanation:
The question pertains to Zipcar, which is a company that provides an innovative car-sharing service. They propose a specific pricing scheme for their members. Understanding and analyzing such a pricing scheme involves calculating potential expenses for users under different usage scenarios, which is influenced (though not directly related) by the fact that the cost of car maintenance is considered to be exponentially distributed with a mean of $150.In this context, the exponential distribution is a statistical concept typically studied in business courses in relation to risk management, finance, and operations management. An exponential distribution often describes the time between events in a Poisson process, where events occur continuously and independently at a constant average rate. In the case of car maintenance for Zipcar, this concept would be relevant for anticipating costs and setting pricing models to ensure profitability and coverage of the maintenance expenses that might occur during the cars' lifespans.Knowing that on average, the maintenance cost is $150, and that the distribution of these costs is exponential, Zipcar would use this information to inform their pricing strategy. They need to ensure that the collection of subscription fees, security deposits, and usage-based fees cover all their expenditures, including maintenance. High variability in maintenance costs demands careful financial planning to avoid losses.In conclusion, Zipcar's pricing strategy must account for the maintenance costs associated with their fleet of cars. The use of exponential distribution in this scenario is instrumental in estimating and spreading the risk associated with these costs over their customer base, thus shaping the pricing scheme to balance affordability for users and profitability for the company.