Respond to each classmate 100 words or more Classmate 1 Companies use yield management systems for many reasons. They can determine the most effective way to price and allocate inventory to reach eve
Respond to each classmate 100 words or more
Companies use yield management systems for many reasons. They can determine the most effective way to price and allocate inventory to reach every future consumer which causes them to make real time adjustments as the conditions of the market change in real time with customers.
It helps to assess the future consumer behavior in the market. It is also a good form of communication instantaneously to the distribution and sales outlets that deal with the real-time consumers. Yield management systems serve as a decision support resource for marketing and operational business functions of the organization such as pricing, scheduling, product development, advertising, sales, etc. Firms use this system because it helps companies maximize profits or revenue from a fixed and time-limited resource. This is because these inventories are perishable in nature and the yield management system is the best strategy to sell the services and allocate the resources accordingly. Examples are train seats and hotel room reservation. The system ensures that the owners of hotels are making the most money possible from their assets. With high fixed costs, hotels need to yield the most revenue possible from those fixed costs. Hotels also need to yield the most revenue from existing demand to be as efficient as possible with related distribution and marketing expenses. If revenue increases, and expenses are fixed, there’s a significant impact on profitability, as that additional revenue is nearly pure profit.
Organizations use yield management systems to understand a consumer’s consumption and behavior patterns. It assists in determining the best approach to allocate and price stock. Yield management systems communicate consumer information to give outlets. It makes decisions about marketing and operational function. Yield management systems maximize revenue from limited resources. It assists in supporting business functions like scheduling, product development, pricing, advertising, and sales.
Yield management systems attempt to sell all inventory to receive the most amount of profit. It most likely can be perishable. An example is hotel room reservations and airlines. The hotel rooms and airlines need to sell rooms and seats to receive the maximum amount of profit. If a room is not rented or a seat is not sold, the airline will receive a profit nor will the hotel room make profits. Yield management systems allow for the airline to give discount seats. It also allows hotels to rent rooms through discounted sites. It can motivate consumers to buy. The rooms and seats cannot go up in price. Consumers are bound to speak tell others about the price. It can create a chaotic situation. There are times when a hotel and airline overbook to ensure that all seats and rooms are booked. A business can truly benefit from using yield management systems. The yield management system includes airlines, cruise lines, car rental agencies, railroad services, TV broadcasting, and hotels. A couple can do well in the yield management system by having segmentable markets, time-variable demand, reservations, and perishable inventory.