Lecture 9: Yield Management

Question 1

What are two problems regarding fluctuating demand?

Answer 1

Off peak too low -> overcapacity
Peak too high -> undercapacity

Question 2

What are two ways to fix overcapacity and undercapacity?

Answer 2

Shift peaks –> existing customers and services
Fill up off-peaks –> new customers and services

Question 3

What are 5 ways to manage demand?

Answer 3

1. Partition demand
2. Develop reservation systems
3. Promoting off-peak demand
4. Establish price incentives
5. Develop complementary services

Question 4

What are 6 ways to manage supply?

Answer 4

1. Increase customer participation
2. Schedule workshifts
3. Use part time employees
4. Cross train personnel
5. Create adjustable capacity
6. Share capacity