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Unformatted text preview: (2) (3) (4) Forecasts Best Likely Worst (hours) (hours) (hours) Trial work Legal research Corporate law Real estate law Criminal law Total hours Lawyers needed 1,800 4,500 8,000 1,700 3,500 19,500 39 1,500 4,000 7,000 1,500 3,000 17,000 34 1,200 3,500 6,500 1,300 2,500 15,000 30 Capacity Constraints (5) (6) Maximum Number of Demand in Qualified People Personnel 3.6 9.0 16.0 3.4 7.0 4 32 15 6 12 13 – 60 Five Service Scenarios Airline industry Extremely complex planning problem Involves number of flights, number of passengers, air and ground personnel, allocation of seats to fare classes Resources spread through the entire system 13 – 61 Yield Management Allocating resources to customers at prices that will maximize yield or revenue ● CRM: customer relationship management. 1. Service or product can be sold in advance of consumption 2. Demand fluctuates 3. Capacity is relatively fixed 4. Demand can be segmented 5. Variable costs are low and fixed costs are high 13 – 62 Yield Management Example Room sales Demand Curve Potential customers exist who are willing to pay more than the $15 variable cost of the room, but not $150 100 Passed-up contribution 50 Total $ contribution = (Price) x (50 rooms) = ($150 $15) x (50) = $6,750 $15 Variable cost of room Some customers who paid $150 were actually willing to pay more for the room Money left on the table $150 Price charged for room Price 13 – 63 Yield Management Example Demand Curve Room sales 100 Total $ contribution = (1st price) x 30 rooms + (2nd price) x 30 rooms = ($100 - $15) x 30 + ($200 - $15) x 30 = $2,550 + $5,550 = $8,100 60 30 $15 Variable cost of room $100 Price 1 for room $200 Price 2 for room Price 13 – 64 Yield Management Matrix Price Tend to be predictable Tend to be Uncertain Duration of use Tend to be fixed Tend to be variable Quadrant 1: Quadrant 2: Movies Stadiums/arenas Convention centers Hotel meeting space Hotels Airlines Rental cars Cruise lines Quadrant 3: Quadrant 4: Restaurants Golf courses Internet service providers Continuing care hospitals 13 – 65 Making Yield Management Making Work Work 1. Multiple pricing structures must be feasible and appear logical to the customer 2. Forecasts of the use and duration of use 3. Changes in demand 13 – 66...
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This document was uploaded on 02/19/2014.

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