311_session_21_revenue_management

311_session_21_revenue_management - Introduction to Revenue...

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1 Introduction to Revenue Management and Decision Trees BUAD311 Session 21
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2 Objectives Introduction to Revenue Management History How it works Decision making under uncertainty How to use Decision Trees
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3 RM: A Basic Business Need What are the basic ways to improve profits? Profits Profits $ Reducing Cost Increasing Revenue Revenue Management
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4 Revenue Management forecasting capacity control overbooking optimization market segmentation pricing
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5 ‘Selling the right seats to the right customers at the right prices and the right time.’ (American Airlines 1987) Revenue Management Definitions (Squeezing as many dollars as possible out of the customers) ‘Integrated control and management of price and capacity (availability) in a way that maximizes company profitability.’
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6 Revenue Management History RM was ‘invented’ by major US carriers after airline deregulation in the late 1970’s to compete with new low cost carriers Matching of low prices was not an alternative because of higher cost structure American Airline’s ‘super saver fares’ (1985) have been the first capacity controlled discounted fares
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This note was uploaded on 09/11/2011 for the course BUAD 311 taught by Professor Vaitsos during the Spring '07 term at USC.

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311_session_21_revenue_management - Introduction to Revenue...

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