Dynamic Pricing and Revenue Management IEOR 4601

 Why Study Dynamic Pricing and Revenue Management? ¡?? Revenue Management had its origins in the airline industry and is one of the most successful applications of Operations Research to decision making ¡?? Pricing and capacity allocation decisions directly impact the bottom line ¡?? Pricing transparency and competition make pricing and capacity allocation decisions more difficult and more important Applications of Dynamic Pricing and Revenue Management ¡?? Capacity allocation of limited, perishable, resources to different fare classes l?? Airlines, hotels, car rentals, cruises, travel packages, tickets for events ¡?? Design and pricing of products l?? Fare restrictions and pricing l?? Consumption and fulfillment options l?? Upgrades, downgrades and upsells ¡?? Pricing under competition l?? Electronic-commerce Objectives of this course ¡?? Understand the critical tradeoffs and decisions in Revenue Management ¡?? Learn how to l?? Monitor and control product availability for single and multiple resources l?? Overbook limited resources when customers shows are random l?? Use upgrades, upsells and real options to improve revenues l?? Price under competition l?? Improve on the current practice of Revenue Management “Physics should be explained as simply as possible, but no simpler.” Albert Einstein Professor Gal ego’s experience and background on subject ¡?? Author of seminal papers on dynamic pricing and revenue management ¡?? Winner of several prices from academia and industry related to work on Revenue Management ¡?? Consultant for airlines and RM solution providers ¡?? Consultant for other users of Revenue Management Readings ¡?? Class Notes l?? I will provide with notes of the different topic we cover in class ¡??