Integrated Capacity and Price Control in Revenue Management

Due to tough competition and increased customer-orientation, companies must improve their management of revenue objectives. In the context of a fluctuating demand and the unknown price behaviour of customers, the practice-oriented development of a revenue management approach for an integrated control of capacities and prices becomes essential.

Michael Becher develops a concept for an integrated capacity and price control in revenue management. His concept is based on fuzzy expert controllers and complies with the defined business and application requirements. The resulting approach is evaluated in three applications: capacity control in waste incineration industry, price control in hotels and integrated capacity and price control in goods distribution. The results show that the amount of coverage can be increased due to the application of the proposed concept.

Auteur
Dr. Michael Becher ist wissenschaftlicher Mitarbeiter von Prof. Dr. Axel Tuma am Lehrstuhl für Betriebswirtschaftslehre, insbesondere Produktions- und Umweltmanagement, der Universität Augsburg.

Résumé
Analyzing the basic conditions of modern service and production processes, the strengthened competition constraints and unpredictable demand fluctuations are obvious factors which c- ate an intense pressure, on the one hand, to reduce costs through an efficient process control and, on the other hand, to optimize revenue through an adequate capacity and price control (demand-side revenue optimization). Two points can be recognized when analyzing the - search on this basic profit maximization problem: Firstly, much of the research focuses on the cost-reduction problem. This is characterized, for instance, by the operational control of p- duction schedules or the logistics planning. Direct customer interaction is not the main point addressed here. Secondly, the research field underlying the capacity and price control problem during the customer transaction mostly focuses only on one of these two control components of a profit-enhancing Revenue Management. Within the implementation of a Revenue M- agement approach, it is the real-world applicability which should be focused on. With respect to unexpected fluctuations in demand and unknown behavior of the customers in respect of prices, a solution must be provided that considers these uncertainties in a way which will - sure that the necessary information can be obtained in practice. Against this background, Mr. Becher develops a concept for an integrated capacity and price control in Revenue Management based on Fuzzy Expert Controllers. It is able to solve the outlined revenue objective under a practicable consideration of the underlying uncertainties.

Contenu
Conception for a simultaneous capacity and price control.- Concretization of the concept for the simultaneous capacity and price control.- Analysis of the capacity control option: FECC.- Analysis of the price control option: FEPC.- Analysis of the integrated capacity and price control: FESCPC.- Summary.