Question 1

Explain how differential pricing can benefit a firm.

Accepted Answer

If a supplier serves multiple customer s

Question 2

To successfully use revenue management when serving multiple customer segments,a firm must use which of the following tactics effectively?

Accepted Answer

A)  Price based on the value assigned by each segment 
B)  Use different prices for each segment 
C)  Forecast at the segment level 
D)  all of the above 
A)  Price based on the value assigned by each segment 
B)  Use different prices for each segment 
C)  Forecast at the segment level 
D)  all of the above

Question 3

The amount reserved for the spot market should be

Accepted Answer

A)  such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale. 
B)  such that the expected marginal revenue from the spot market exceeds the current revenue from a bulk sale. 
C)  such that the expected marginal revenue from the spot market is less than the current revenue from a bulk sale. 
D)  equal to the maximum revenue available from the spot. 
A)  such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale. 
B)  such that the expected marginal revenue from the spot market exceeds the current revenue from a bulk sale. 
C)  such that the expected marginal revenue from the spot market is less than the current revenue from a bulk sale. 
D)  equal to the maximum revenue available from the spot.

Question 4

Wasted capacity (or inventory)occurs when

Accepted Answer

A)  there are excessive cancellations. 
B)  there are few cancellations. 
C)  an expensive backup needs to be arranged. 
D)  all of the above 
A)  there are excessive cancellations. 
B)  there are few cancellations. 
C)  an expensive backup needs to be arranged. 
D)  all of the above

Question 5

Spoilage occurs when the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize.

Accepted Answer

A) True 
 B)False

Question 6

The reserved quantity will be affected by the difference in margin between the spot market and the bulk sale,but not the distribution of demand from the spot market.

Accepted Answer

A) True 
 B)False

Question 7

The amount of the asset reserved for the higher price segment is such that

Accepted Answer

A)  all orders from the lower priced segment will be accepted and filled. 
B)  the expected marginal revenue from the higher priced segment is more than the price to the lower price segment. 
C)  the expected marginal revenue from the higher priced segment is less than the price to the lower price segment. 
D)  the expected marginal revenue from the higher priced segment equals the price to the lower price segment. 
A)  all orders from the lower priced segment will be accepted and filled. 
B)  the expected marginal revenue from the higher priced segment is more than the price to the lower price segment. 
C)  the expected marginal revenue from the higher priced segment is less than the price to the lower price segment. 
D)  the expected marginal revenue from the higher priced segment equals the price to the lower price segment.

Question 8

An order from a lower price buyer should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer.

Accepted Answer

A) True 
 B)False

Question 9

The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.

Accepted Answer

A) True 
 B)False

Question 10

Any asset that loses value over time is perishable.

Accepted Answer

A) True 
 B)False

Question 11

Effective differential pricing over time will generally increase the level of product availability for the consumer willing to pay full price,but will decrease total profits for the retailer.

Accepted Answer

A) True 
 B)False

Question 12

An effective revenue management tactic when faced with seasonal peaks is to charge a

Accepted Answer

A)  high price during the peak period and a higher price during off-peak periods. 
B)  higher price during the peak period and a lower price during off-peak periods. 
C)  lower price during the peak period and a higher price during off-peak periods. 
D)  low price during the peak period and a lower price during off-peak periods. 
A)  high price during the peak period and a higher price during off-peak periods. 
B)  higher price during the peak period and a lower price during off-peak periods. 
C)  lower price during the peak period and a higher price during off-peak periods. 
D)  low price during the peak period and a lower price during off-peak periods.

Question 13

Faced with seasonal peaks,an effective revenue management tactic is to charge a higher price during the peak period and a higher price during off-peak periods.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The amount of the asset reserved for the higher price segment is such that the expected marginal revenue from the higher priced segment is less than the price to the lower price segment.

Accepted Answer

A) True 
 B)False

Question 16

The tactic of overbooking or overselling of the available asset is suitable in any situation in which customers are able to cancel orders and the value of the asset drops significantly after a deadline.Which of the following would not be an example of this?

Accepted Answer

A)  Computers 
B)  Airlines seats 
C)  Production capacity 
D)  Items designed for a specific holiday 
A)  Computers 
B)  Airlines seats 
C)  Production capacity 
D)  Items designed for a specific holiday

Question 17

The two forms of supply chain assets are

Accepted Answer

A)  capacity and inventory. 
B)  capacity and revenue. 
C)  inventory and revenue. 
D)  inventory and warehouse space. 
A)  capacity and inventory. 
B)  capacity and revenue. 
C)  inventory and revenue. 
D)  inventory and warehouse space.

Question 18

An order from a lower price buyer

Accepted Answer

A)  should always be accepted rather than waiting for potential revenue from a higher price buyer. 
B)  should only be accepted if the expected revenue from a higher price buyer is higher than the current revenue from the lower price buyer. 
C)  should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer. 
D)  should not be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer. 
A)  should always be accepted rather than waiting for potential revenue from a higher price buyer. 
B)  should only be accepted if the expected revenue from a higher price buyer is higher than the current revenue from the lower price buyer. 
C)  should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer. 
D)  should not be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer.

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

In theory,the concept of differential pricing decreases total cost for a firm.

Accepted Answer

A) True 
 B)False

Explain how differential pricing can benefit a firm.

To successfully use revenue management when serving multiple customer segments,a firm must use which of the following tactics effectively?

The amount reserved for the spot market should be

Wasted capacity (or inventory)occurs when

Spoilage occurs when the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize.

The reserved quantity will be affected by the difference in margin between the spot market and the bulk sale,but not the distribution of demand from the spot market.

The amount of the asset reserved for the higher price segment is such that

An order from a lower price buyer should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer.

The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.

Any asset that loses value over time is perishable.

Effective differential pricing over time will generally increase the level of product availability for the consumer willing to pay full price,but will decrease total profits for the retailer.

An effective revenue management tactic when faced with seasonal peaks is to charge a

Faced with seasonal peaks,an effective revenue management tactic is to charge a higher price during the peak period and a higher price during off-peak periods.

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

The amount of the asset reserved for the higher price segment is such that the expected marginal revenue from the higher priced segment is less than the price to the lower price segment.

The tactic of overbooking or overselling of the available asset is suitable in any situation in which customers are able to cancel orders and the value of the asset drops significantly after a deadline.Which of the following would not be an example of this?

The two forms of supply chain assets are

An order from a lower price buyer

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.

In theory,the concept of differential pricing decreases total cost for a firm.

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

Explain how differential pricing can benefit a firm.

To successfully use revenue management when serving multiple customer segments,a firm must use which of the following tactics effectively?

The amount reserved for the spot market should be

Wasted capacity (or inventory)occurs when

Spoilage occurs when the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize.

The reserved quantity will be affected by the difference in margin between the spot market and the bulk sale,but not the distribution of demand from the spot market.

The amount of the asset reserved for the higher price segment is such that

An order from a lower price buyer should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer.

The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.

Any asset that loses value over time is perishable.

Effective differential pricing over time will generally increase the level of product availability for the consumer willing to pay full price,but will decrease total profits for the retailer.

An effective revenue management tactic when faced with seasonal peaks is to charge a

Faced with seasonal peaks,an effective revenue management tactic is to charge a higher price during the peak period and a higher price during off-peak periods.

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

The amount of the asset reserved for the higher price segment is such that the expected marginal revenue from the higher priced segment is less than the price to the lower price segment.

The tactic of overbooking or overselling of the available asset is suitable in any situation in which customers are able to cancel orders and the value of the asset drops significantly after a deadline.Which of the following would not be an example of this?

The two forms of supply chain assets are

An order from a lower price buyer

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.

In theory,the concept of differential pricing decreases total cost for a firm.

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