Explain why forecasting is important to revenue management
What will be an ideal response?
Answer: The foundation of any revenue management system is the forecasting function. To use overbooking with any degree of success, a firm must be able to forecast cancellation patterns. Forecasting does not mean obtaining an estimate that is always accurate. Forecasting involves estimating demand and also attributing an expected error to the forecast itself. Both the estimated value and the expected error are important inputs into any revenue management model. Finally, as new information becomes available, reforecast to see if the revenue management tactics currently in place are still appropriate. The frequency of forecasting will depend on the amount of market activity. Ideally, the forecast and the revenue management decision should be evaluated after every transaction.
You might also like to view...
India has the youngest demographic profile among the world's large nations with more than half of its population being younger than 25 and the number of young people below the age of 14 is greater than the entire U.S. population
Indicate whether the statement is true or false
State administrative agencies are created by ________
A) legislative branches of states B) legislative branches of the federal government C) the U.S. President D) the U.S. Congress
Bond investors lend their money for a fixed period of time and receive interest
Indicate whether the statement is true or false.
Answer the following statement(s) true (T) or false (F)
The venture capital pool is rapidly declining due to overfunding.