MSCI 548: Revenue Management
(Phase II - Spring/Summer Term)
Tutor: Dr Arne Strauss
Objectives
Revenue management has transformed product pricing in transportation and hospitality. For example, tickets for the same airline flight may be sold at many different fares throughout the booking horizon, depending on product restrictions, the remaining time until departure and the number of unsold seats. It involves pricing and revenue optimization so that prices and product availability can be set and updated across selling channels to maximize profits.
In this course you will learn to identify and exploit opportunities for revenue optimization in different business contexts. You will review the main methodologies that are used in each of these areas, discuss legal issues associated with different pricing strategies, and survey current practices in different industries. The course places particular emphasis on the tactical optimization of pricing and capacity allocation decisions.
Core text
Phillips, Robert (20055) Pricing and revenue optimization, Stanford University Press. This textbook is mandatory and a purchase that will be useful for your future work.
Topics
Introduction to Revenue Management
Review of Pricing Theory
Market Segmentation with differential pricing
Pricing as Constrained Optimization Problem
Markdown Management
Dynamic Pricing
Integrating the RM concepts in different industries
Assessment
One CWA problem set at the end of the course.
Contact hours
10 lectures (each 60 minutes).
