Lec 13 - 10/18/2010 IEOR151LectureNotesonRevenueManagement...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
10/18/2010 IEOR 1 gement 51 – Lecture Notes on Revenue Management Revenue Mana 1. Importance 2. Two techniques el/booking limit a. Protection lev b. Overbooking and. As a service firm, the most difficult problem is to match supply and dem Inventory Inputs: Supply (e.g. airline seats and hotel rooms), Demand evenue management involves methods in smoothing the fluctuating demand. R Revenue management began in 1980s by American Airlines ty ‐average number of passengers on each flight is 73% of capaci ‐needs 70% to breakeven, so profit margin was not very high ‐reported $500M/yr after implementing revenue management W rentals, sporting events, concerts) hat industries? (eg. hotels, car /capacity Perishable inventory ers Segment custom Fixed capacity and Random dem Competition Capacity is sold in advance It is important to implement Revenue Management as it may have a substantial impact on profits. The followin s concept: g is an illustration of thi Profit = Revenue – Cost Assume a company increases revenues by 6% RevNew = RevOld x (1.06)
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

Lec 13 - 10/18/2010 IEOR151LectureNotesonRevenueManagement...

This preview shows document pages 1 - 2. Sign up to view the full document.

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