Question 1

It is important for the firm to structure its revenue management program in a way that

Accepted Answer

A)  it is presented simply as a mechanism for extracting maximum revenue. 
B)  revenue increases while improving service along some dimension that is important to customers that pay the highest price. 
C)  profit is maximized. 
D)  all of the above 
A)  it is presented simply as a mechanism for extracting maximum revenue. 
B)  revenue increases while improving service along some dimension that is important to customers that pay the highest price. 
C)  profit is maximized. 
D)  all of the above

Question 2

The decision to use overbooking will

Accepted Answer

A)  lead to upset customers and a high cost of providing them space. 
B)  lead to unutilized assets and lost revenue. 
C)  lead to reduced profits. 
D)  depend upon optimization to be successful. 
A)  lead to upset customers and a high cost of providing them space. 
B)  lead to unutilized assets and lost revenue. 
C)  lead to reduced profits. 
D)  depend upon optimization to be successful.

Question 3

Too high a level of overbooking will lead to unutilized assets and lost revenue.

Accepted Answer

A) True 
 B)False

Question 4

The basic trade-off to consider during overbooking is between having wasted capacity (or inventory)because of few cancellations or having a shortage of capacity (or inventory)because of excessive cancellations.

Accepted Answer

A) True 
 B)False

Question 5

The basic trade-off to be considered by the supplier with production capacity is between

Accepted Answer

A)  committing to an order from a high-price buyer or waiting for a lower price buyer to arrive later on. 
B)  committing to an order from a lower price buyer or waiting for a high-price buyer to arrive later on. 
C)  allowing the market to be controlled by price or capacity. 
D)  having marketing or operations establish the constraints within which orders are accepted. 
A)  committing to an order from a high-price buyer or waiting for a lower price buyer to arrive later on. 
B)  committing to an order from a lower price buyer or waiting for a high-price buyer to arrive later on. 
C)  allowing the market to be controlled by price or capacity. 
D)  having marketing or operations establish the constraints within which orders are accepted.

Question 6

The forecasting function is not necessary for most revenue management systems.

Accepted Answer

A) True 
 B)False

Question 7

In most instances of differential pricing,demand from the segment paying the lower price

Accepted Answer

A)  arises earlier in time than demand from the segment paying the higher price. 
B)  arises later in time than demand from the segment paying the higher price. 
C)  arises about the same time as demand from the segment paying the higher price. 
D)  arises both earlier and later in time than demand from the segment paying the higher price. 
A)  arises earlier in time than demand from the segment paying the higher price. 
B)  arises later in time than demand from the segment paying the higher price. 
C)  arises about the same time as demand from the segment paying the higher price. 
D)  arises both earlier and later in time than demand from the segment paying the higher price.

Question 8

Revenue management adjusts the pricing and available supply of assets and has a significant impact on supply chain profitability when one of four conditions exist.Which is not one of the four conditions listed in the textbook?

Accepted Answer

A)  The product is highly perishable or product wastage occurs. 
B)  Demand has seasonal and other peaks. 
C)  The product is sold both in bulk and on the spot market. 
D)  The value of the product is the same across different market segments. 
A)  The product is highly perishable or product wastage occurs. 
B)  Demand has seasonal and other peaks. 
C)  The product is sold both in bulk and on the spot market. 
D)  The value of the product is the same across different market segments.

Question 9

Customers will have a negative perception of revenue management tactics if they are simply presented as a mechanism for extracting maximum revenue.

Accepted Answer

A) True 
 B)False

Question 10

When the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize,this is

Accepted Answer

A)  spill. 
B)  spoilage. 
C)  wastage. 
D)  excess. 
A)  spill. 
B)  spoilage. 
C)  wastage. 
D)  excess.

Question 11

The tactic of overbooking or overselling the available asset is suitable in any situation where customers are able to cancel orders and the value of the asset drops significantly after a deadline.

Accepted Answer

A) True 
 B)False

Question 12

Revenue management is the use of pricing to increase the supply chain surplus and profit generated from a limited availability of supply chain assets.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not listed as a step in revenue management?

Accepted Answer

A)  Quantify the benefits of revenue management. 
B)  Implement a forecasting process. 
C)  Involve sales and not operations 
D)  Understand and inform the customer. 
A)  Quantify the benefits of revenue management. 
B)  Implement a forecasting process. 
C)  Involve sales and not operations 
D)  Understand and inform the customer.

Question 14

The fundamental trade-off between selling in bulk or on the spot market is

Accepted Answer

A)  different from the situation where a firm serves two market segments. 
B)  similar to the case when a firm serves two market segments. 
C)  similar to the case where a firm must deal with seasonal demand. 
D)  similar to the case where a firm has a perishable asset. 
A)  different from the situation where a firm serves two market segments. 
B)  similar to the case when a firm serves two market segments. 
C)  similar to the case where a firm must deal with seasonal demand. 
D)  similar to the case where a firm has a perishable asset.

Question 15

Airline seats are a good example of a product whose value is the same across different market segments.

Accepted Answer

A) True 
 B)False

Question 16

To differentiate between the various market segments,the firm must either eliminate barriers that identify product or service attributes the segments value differently.

Accepted Answer

A) True 
 B)False

Question 17

Revenue management may be defined as

Accepted Answer

A)  the use of differential costing based on product or capacity availability to decrease supply chain cost. 
B)  the use of differential costing based on customer segment, time of use, and product or capacity availability to increase profitability. 
C)  the use of differential pricing based on customer segment, time of use, and product or capacity availability to decrease supply chain surplus. 
D)  the use of differential pricing based on customer segment, time of use, and product or capacity availability to increase supply chain surplus. 
A)  the use of differential costing based on product or capacity availability to decrease supply chain cost. 
B)  the use of differential costing based on customer segment, time of use, and product or capacity availability to increase profitability. 
C)  the use of differential pricing based on customer segment, time of use, and product or capacity availability to decrease supply chain surplus. 
D)  the use of differential pricing based on customer segment, time of use, and product or capacity availability to increase supply chain surplus.

Question 18

The goal of optimization in revenue management is to identify a tactic

Accepted Answer

A)  using forecasts of customer behavior that will be most effective. 
B)  using linear regression that will maximize revenue. 
C)  using linear regression that will minimize cost. 
D)  that will not have to be altered. 
A)  using forecasts of customer behavior that will be most effective. 
B)  using linear regression that will maximize revenue. 
C)  using linear regression that will minimize cost. 
D)  that will not have to be altered.

Question 19

Describe the role of revenue management.

Accepted Answer

Pricing is an important lever to increas

Question 20

Airline seats are a good example of a product whose value varies by market segment.

Accepted Answer

A) True 
 B)False

It is important for the firm to structure its revenue management program in a way that

The decision to use overbooking will

Too high a level of overbooking will lead to unutilized assets and lost revenue.

The basic trade-off to consider during overbooking is between having wasted capacity (or inventory)because of few cancellations or having a shortage of capacity (or inventory)because of excessive cancellations.

The basic trade-off to be considered by the supplier with production capacity is between

The forecasting function is not necessary for most revenue management systems.

In most instances of differential pricing,demand from the segment paying the lower price

Revenue management adjusts the pricing and available supply of assets and has a significant impact on supply chain profitability when one of four conditions exist.Which is not one of the four conditions listed in the textbook?

Customers will have a negative perception of revenue management tactics if they are simply presented as a mechanism for extracting maximum revenue.

When the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize,this is

The tactic of overbooking or overselling the available asset is suitable in any situation where customers are able to cancel orders and the value of the asset drops significantly after a deadline.

Revenue management is the use of pricing to increase the supply chain surplus and profit generated from a limited availability of supply chain assets.

Which of the following is not listed as a step in revenue management?

The fundamental trade-off between selling in bulk or on the spot market is

Airline seats are a good example of a product whose value is the same across different market segments.

To differentiate between the various market segments,the firm must either eliminate barriers that identify product or service attributes the segments value differently.

Revenue management may be defined as

The goal of optimization in revenue management is to identify a tactic

Describe the role of revenue management.

Airline seats are a good example of a product whose value varies by market segment.

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Information Technology in a Supply Chain

Sustainability and the Supply Chain

Filters

Exam 16: Pricing and Revenue Management in a Supply Chain

It is important for the firm to structure its revenue management program in a way that

The decision to use overbooking will

Too high a level of overbooking will lead to unutilized assets and lost revenue.

The basic trade-off to consider during overbooking is between having wasted capacity (or inventory)because of few cancellations or having a shortage of capacity (or inventory)because of excessive cancellations.

The basic trade-off to be considered by the supplier with production capacity is between

The forecasting function is not necessary for most revenue management systems.

In most instances of differential pricing,demand from the segment paying the lower price

Revenue management adjusts the pricing and available supply of assets and has a significant impact on supply chain profitability when one of four conditions exist.Which is not one of the four conditions listed in the textbook?

Customers will have a negative perception of revenue management tactics if they are simply presented as a mechanism for extracting maximum revenue.

When the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize,this is

The tactic of overbooking or overselling the available asset is suitable in any situation where customers are able to cancel orders and the value of the asset drops significantly after a deadline.

Revenue management is the use of pricing to increase the supply chain surplus and profit generated from a limited availability of supply chain assets.

Which of the following is not listed as a step in revenue management?

The fundamental trade-off between selling in bulk or on the spot market is

Airline seats are a good example of a product whose value is the same across different market segments.

To differentiate between the various market segments,the firm must either eliminate barriers that identify product or service attributes the segments value differently.

Revenue management may be defined as

The goal of optimization in revenue management is to identify a tactic

Describe the role of revenue management.

Airline seats are a good example of a product whose value varies by market segment.

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Information Technology in a Supply Chain

Sustainability and the Supply Chain

Filters