1. Which of the following statements is NOT true about the Revenue Management? a. Revenue management...

1. Which of the following statements is NOT true about the Revenue Management?
a. Revenue management is based on setting and updating prices.
b. Revenue management is originated in the airline industry.
c. Through revenue management, the firms can allocate their capacity to different fare classes over time in order to maximize revenue.
d. Revenue management focuses on shaping demand via controlling supply under the limited capacity.

2. According to the Littlewood’s Rule, which of the following does NOT generate pressure to increase the booking limit?
a. Increase in the full-fare price
b. Increase in the discount-fare price
c. Increase in the plane capacity
d. Decrease in the average full-fare demand

3. A hotel has 200 rooms and the historical show rate is 90%. What will be the (closest) optimal overbooking level given by the deterministic overbooking heuristic?
a. 222
b. 180
c. 200
d. None of the above
e. 220

Expert Solution

1. Option D is correct as it is the only false statement about revenue management.

2. Option A is correct. Increase in the full fare price doesn't cause it, increase in discounted fare price does.

3. The optimal overbooking level will be = 200/0.9 = 222.22. Option A is correct.

jeff jeffy answered 2 years ago

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