Lecture10 - MBAC6080 Decision Modeling and Applications...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
1 MBAC6080 Thomas Vossen Assistant professor of Operations Management Leeds School of Business University of Colorado Boulder, CO 80309-0419 Decision Modeling and Applications
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Lecture 10, 3-19-2008 2 MBAC6080 Today’s Agenda Revenue Management American Airlines Exercise Concepts Issues Yield Management
Background image of page 2
Lecture 10, 3-19-2008 3 MBAC6080 Smart Pricing? Dell: Same product is sold at a different price to different consumers (private/small or large business/government/academia/health care) Price of the same product for the same industry varies Amazon Books.com had a lower price than Amazon 99% of the time, yet Amazon had 80% of the market in 2000 while Books.com only 2% Nikon, Sharp… Mail-In-Rebate Boise Cascade office Prices of 12,000 items sold on-line may change as often as daily
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Lecture 10, 3-19-2008 4 MBAC6080 Consumer Goods Example Pocket Price Waterfall 71% 82% 100% Competitive Discounts Sales Specials Exception Deals Quantity Shipment Allowance Terminal Allowance Direct Factory Shipment Discount Cash Discounts Annual Volume Bonus Product Bonus Co-op Advertising Special Promos Freight 8 2 2 2 2 3 2 Average “Pocket Discount” of 29% 3 1 1 2 1 Key Dealer Price Invoice Price Pocket Price The Price Waterfall Source: Manugistics. Dr. Bob Philips
Background image of page 4
Lecture 10, 3-19-2008 5 MBAC6080 One Product - Many Prices 9% 16% 26% 19% 11% 6% 8% 2% 3% >40 35 30 25 20 15 10 5 List Discount to List Price Percent of Total Volume Consumer Goods Example
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Lecture 10, 3-19-2008 6 MBAC6080 Revenue Management Allocating the right type of capacity to the right kind of customer at the right price so as to maximize revenue or yield”
Background image of page 6
Lecture 10, 3-19-2008 7 MBAC6080 Growth in Revenue Management Use
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Lecture 10, 3-19-2008 8 MBAC6080 Types of Revenue Management Description Industries Traditional RM Allocating tickets or spaces to fare classes Passenger airlines, hotels, rental cars, cruise lines, freight. .. Bid Pricing Bidding Mostly B to B including freight, industrial goods, financial services Promotions Various Mostly B to C including retail, CPG, travel, consumer durables Markdowns Discounting perishable or fashion goods Fashion goods, seasonal retail goods, consumer electronics Dynamic Pricing Updating price lists over time in response to changing market and supply conditions Retail, e-commerce, many others
Background image of page 8
Lecture 10, 3-19-2008 9 MBAC6080 Example Cruise Ship: C=400 identical cabins Given Price-Quantity relationship What is the price that the company should charge to maximize revenue?
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Lecture 10, 3-19-2008 10 MBAC6080 Example: Price-Quantity Relationship Price No. seats 2000 1000 P=2000-2Q
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/01/2008 for the course MBAC 6080 taught by Professor Vossen during the Spring '08 term at Colorado.

Page1 / 42

Lecture10 - MBAC6080 Decision Modeling and Applications...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online