Describe the role of revenue management
What will be an ideal response?
Answer: Pricing is an important lever to increase supply chain profits by better matching supply and demand. Pricing may influence demand if customers are price sensitive. Revenue management is the use of pricing to increase the profit generated from a limited supply of supply chain assets. Supply chain assets exist in two forms–capacity and inventory. Capacity assets in the supply chain exist for production, transportation, and storage. Inventory assets exist throughout the supply chain and are carried to improve product availability.
Management decisions should try to maximize the total margin earned from these assets. To increase the total margin, managers must use all available levers, including price. This is the primary role of revenue management. Traditionally, firms have often invested in or eliminated assets to reduce the imbalance between supply and demand. Firms build additional capacity during the growth part of a business cycle and shut some of the capacity down during a downturn. Ideas from revenue management suggest that a firm should first use pricing to achieve some balance between supply and demand, and only then invest in or eliminate assets. Revenue management may also be defined as the use of differential pricing based on customer segment, time of use, and product or capacity availability to increase supply chain surplus.
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The following items were reported on the balance sheets and income statement for Carlton Co: Accounts receivable, December 31, 2015 $185,000 Accounts receivable, December 31, 2016 178,000 Sales—2016 850,000 What amount would be reported in the operating activities section of the statement of cash flows for collections from customers under the direct method assuming that all sales are on credit?
a. $850,000 b. $857,000 c. $843,000 d. Cannot be determined without further information.
______ leaders promote stability rather than change and are described as task and reward oriented, structured, and passive.
a. Charismatic b. Servant c. Transactional d. Visionary
All of the following are examples of facility sustaining costs except:
A. Costs of personnel support. B. Costs of custodial work. C. Costs of cleaning the workplace. D. Costs of employee recreational facilities. E. Costs of sampling product quality.
The first step in solving a graphical linear programming model is to:
A) plot the model constraints as equations on the graph and indicate the feasible solution area. B) plot the objective function and move this line out from the origin to locate the optimal solution point. C) solve simultaneous equations at each corner point to find the solution values at each point. D) determine which constraints are binding.