REVENUE MANAGEMENT AND PRICING

At the end of the course, the student should be able to:
• Understand the basic principles of Revenue Management and its application to a variety of business sectors and industries
• Master basic RM calculations
• Understand the practicalities and implications of RM in the real world not just in theory - formulas and complicated algorithms - with an appreciation of the advantages that it can bring to a business
• Perform analysis and issue reccomandations for actions of management
• Be an ambassador of RM in the future workplace, helping to spread this useful practice in time of crisis such as those we are in at the moment, where every Euro counts
• Be a better manager and make better use of RM services where present

This is a course for those who are interested to learn how it is possible to achieve maximum revenue from a ‘perishable’ asset. A typical example of perishable assets is the seat of a plane, on a certain date, route and time, which once left empty is ‘lost’ for good as a potential source of instant revenue. Built around examples from the airline industry, which is the main user of these fast spreading techniques, the course expand also in other industries (hotels, restaurants, rent-a-cars, theatres and more) via a mix of interactive business games in class, lectures and business cases. It explores both mainstream types of revenue management, the one that leverage prices and that which leverage quantities. It is an introductory course that aims at explaining the basics and does not require higher mathematical knowledge that is normally necessary in this topic; it does nevertheless require certain sympathy for numerical reasoning. It is a very novel topic that is becoming more and more strategic in all streams of the service economy, which now accounts for 70% of GDP in OECD countries (i.e. downstream energy sector). Increasingly employed in new services' subsectors, RM is becoming a key function in many companies, departing the traditional cradle of applied mathematics where it was developed, to land on board of directors and wider management audiences at many levels. The course will cover also organisational issues related to the adoption of these techniques and will touch upon several aspects of its management, from segmentation to pricing and inventory control, among others. By definition, as a discipline, Revenue Management (or RM - sometimes referred to as Yield Management) must operate extremely closely with Marketing, Sales and Operations; this course we will only address issues of pricing related to RM (not other classic pricing issues).