Revenue Management by Iqbal
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This document explains what revenue management is and how it works in various types of businesses..
![Supply Chain Management<br />Revenue Management<br />Submitted to Prof. Dr. Masood<br />Date:July 12, 2010<br />Submitted By:Iqbal9952<br />Syed Hammad Khalid Nadeem9911<br />Aisha Jabeen10087<br />Executive Summury<br />Revenue management (RM) is the science and art of enhancing firm revenues while selling essentially the same amount of product. RM essentially means setting and adjusting prices on a tactical level in order to maximize profit. First used by American Airlines in 1985 to beat its competitor PeoplExpress, then eventually adapted by other industries like Car Rentals, Production (General Motors), hotels, real estate etc. RM works in industries which have perishable goods, sold in advance, capacity limitation, segmented market, high fixed cost, demand fluctuation. RM works in four processes Market Segment Pricing, Peak/Off-Peak Pricing, Forecasting Demand, Inventory Allocation Basics. Airlines have limited number of seats so they vary their prices on various bases to maximize their revenue. The same goes with rental business and hotels. RM faces customer resistance and customers think it is unethical. E-commerce has helped RM to be more effective specially in Airlines Industry.<br />Table Of Contents<br />,[object Object]](https://image.slidesharecdn.com/revenuemanagement-100924161230-phpapp02/85/revenue-management-by-iqbal-1-320.jpg)
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Revenue Management by Iqbal
- 2. 1.1 Introduction …………………………………………………………………………………………4
- 3. 1.2 Definition …………………………………………………………………………………………….5
- 4. 1.3 History and Background ..…………………………………………………………………….5
- 5. Revenue Management Preconditions …………………………..……………………….………7
- 6. 2.1 Preconditions ………….………………………………………………………………….……….7
- 7. How does Revenue Management Work ………………………………………………………9
- 8. 3.1 Market Segment Pricing ….…………………………………………………………………9
- 9. 3.2 Peak/Off-Peak Pricing ………….…………………………………………………………….10
- 10. 3.3 Forecasting Demand …………………………………………………………………………..10
- 11. 3.4 Inventory Allocation Basics ….……………………………………………………………..11
- 12. Use by Industry …………..……………………………………………………………………………….…13
- 13. 4.1 Airline Industry …………………………..…………………………………………………….…14
- 14. 4.2 Hotel Industry ………………….……………………………………………………………….…15
- 15. 4.3 Cars Rental Industry ………..……………………………………………………………….…15
- 16. Other Issues in Revenue Management ……………………………………………..…………...16
- 17. 5.1 Ethical Issues and Questions of Effectiveness ………………..…………………….16
- 18. 5.2 Econometrics ………………..…………………………………………………………………….17
- 19. 5.3 Revenue Management and E-Commerce ……………………………………………18
- 24. How should a product be priced in the different channels?
- 25. How can the firm prevent cannibalization across channels?
- 27. Rental cars can be reserved ahead of the day of rental.
- 28. Hotel rooms and campsite spaces seats for stage shows, sports events, and concerts are sold in advance.
- 29. Package vacations and cruises are usually booked in advance,
- 31. Hotels rooms and seats for stage shows, sports events, and concerts are limited and cannot be sold more than they are.
- 33. “Economy class” customers value low prices, (and perhaps longer stays, advance reservations)
- 37. Easy (Ez) Revenue Management Solutions, http://www.easyrms.com
- 38. Neil L. Salerno, CHME, CHA Coach, Consultant & Author, http://www.hotelmarketingcoach.com
- 40. The Basics of Revenue Managementby Ideas (Integrated Decision and Systems, Inc.)
- 41. Lancaster University Management School, Department of Management Sciences, MBA-Elective Course Revenue Management, 7.2 Presentation Slides<br />