Center of Excellence in Business Analytics


Revenue Management

Businesses spend a great deal of time working to determine what products to sell, what prices to charge, and which customers to target in their marketing efforts. Revenue management aligns with these efforts as it helps business determine the right products to sell, to the right person, at the right time, and in the right place. Revenue management uses historical data to predict future demand as accurately as possible by evaluating and analyzing demand drivers, such as customer behavior, location, and availability. With this information, forecasted demand can be calculated and used by suppliers to inform pricing decisions and make the best arrangement of capacity, resources, and selling channels to maximize performance and profitability.
There are many different industries that have utilized opportunities for revenue optimization profitably. The Airline Industry in the United States was the first to incorporate revenue management at a strategic level. In recent years, a variety of industries have become aware of the power of revenue management and have begun to invest time and labor into the development of systems which harness the power of revenue management.

Revenue Management now has successful applications in Advertising, Sports Management, Hospitality, Car Rental, Broadcasting and emerging applications in the Manufacturing Industry, Financial Services and Health-Care:

What is Revenue Management?

All links download a file in PDF format:

An Overview of Pricing Models for Revenue Management

Milestones in the Application of Analytical Pricing and Revenue Management

Papers published in Interfaces journal by INFORMS:

Casino industry: The “Killer Application” of Revenue Management: Harrah's Cherokee Casino & Hotel

Travelocity Becomes a Travel Retailer

NBC's Optimization Systems Increase Revenues and Productivity

Contract Optimization at Texas Children's Hospital

Revenue Management Saves National Car Rental

Auto industry: Chrysler and J. D. Power: Pioneering Scientific Price Customization in the Automobile Industry

Hospitality industry: Marriott International Increases Revenue by Implementing a Group Pricing Optimizer

Airline industry: "Blind Booking" at Germanwings

Revenue Management Applications in the Manufacturing Industry:

Revenue Management in Make-to-Order Manufacturing: An Application to the Iron and Steel Industry

A Steel Bar Company Uses Prescriptive Analytics to Determine Available-to-Promise Dates

Practice Article: Profit Impact of Revenue Management in the Process Industry

Revenue Management: A Model for Capacity and Pricing Strategies in a Manufacturing Multinational

Revenue Management in Make-To-Order Manufacturing: Case Study of Capacity Control at ThyssenKrupp VDM

Computers and Operations Research: A Two-Stage Bid-Price Control for Make-to-Order Revenue Management