Question

A rental car company purchases 150 cars to use as rental cars. Due regular maintenance and the process of checking cars in and out 45 cars are purchased per day. On average 80 cars are rented daily. What is the effective capacity for this company.

A. 20 cars/day
B. 45 cars/day
C. 30 cars/day
D. 50 cars/day

Answer 1

The effective capacity of the rental car company is 45 cars/day, as this is the rate at which cars are made available for rental, and it is lower than the average rental demand.

Step-by-step explanation:

To calculate the effective capacity of the rental car company, we need to consider both the rate at which cars are made available (purchased for rental) and the average rate at which they are rented out. Given that 45 cars are purchased per day, and 80 cars are rented daily, the effective capacity is limited by the smaller number, which is the number of cars made available for rental daily.

Therefore, the effective capacity is the same as the number of cars purchased per day, which is 45 cars/day. This is because even if there is demand for 80 cars, the company can only provide up to 45 cars daily due to the constraint of the number of cars being prepared for rental each day.