8 Revenue Mgt Flashcards
1
Q
Two ways to increasing revenue
A
- selling same to diff customer segments at different prices
- selling more than you have (OVERBOOKING)
2
Q
How to calculate revenue
A
Price * demand at that price
3
Q
Where is revenue maximized?
A
When the derivative of r(p)=pd(p) is 0
-> r‘(p)=pd‘(p)=0
-> plug that price into the demand function to find the demand (what we will sell)
4
Q
Protection level
A
Amount you protect to sell at premium price
5
Q
Critical ratio meaning
A
The risk of overbooking company should accept to maximize revenues
6
Q
How do you calculate critical ratio
A
Cu/Cu+Co
