Revenue Management Essay Example | Topics and Well Written Essays - 2000 words

Revenue Management - Essay Example Ans: For different industries to flourish in terms of profitability it is necessary for them to allocate their resources properly. The airlines and restaurant industry tend to keep a check over the prices and capacity offered by them. However there is a difference between how both these industries manage their price allocation and the management of capacity. In terms of airlines customers have to pay for the number of seats that they take. In other words they pay for the capacity they take. For e.g. if a customer has booked 2 seats he will pay for both the seats. This is also the case with the hotels as the customers pay for the number of rooms that they book i.e. the capacity they take. However in terms of the restaurant industry capacity is not charged for. Although in different circumstances the customer are forced to pay for the capacity. This is very unusual in the restaurant industry. But for a restaurant to increase its profitability it is necessary that they maintain a regula r booking schedule. This schedule should be properly maintained and should help the customers in booking the seats in a restaurant. This can prove to be very beneficial for the customers and the restaurant as customers would be satisfied with the service they are getting by the restaurant. And on the other hand this booking schedule would help the restaurant to improve its image in front of the customers. But it can also be said that the capacity management is interlinked in these three industries. Each of the industry is conscious about providing customers with maximum satisfaction regarding the issue of capacity. All these industries maintain a booking schedule for this purpose. The customers in these industries require seats according to their own convenience. For e.g. customers require seats in a particular plane on a particular time and same is the case with the customers who visit a restaurant as they book seats according to their own convenience. On the other hand it is also necessary for these industries to keep a control over their management of prices. It can be said that the industry of airlines and restaurant have similarities regarding the management of prices. This is because both the industries aim to maximize their profits and therefore manage their prices accordingly. The seats offered by the airlines are charged according to the level of comfort in them. Many different airlines have varying prices for their seats due to the difference in the comfort level. Prices also differ because of the service timings that the airlines provide. For e.g. some airlines charge higher as their service time is lesser than those of other airlines. Similarly the restaurants charge for the quality of the food they offer. They maintain a balance of price for different commodities they offer. For e.g. the price of some specialties offered by the restaurants are charged higher than the other commodities. At the same time the price differ s in different restaurants also because of the services that they provide. Thus it can be concluded that for both these industries to prosper it is necessary that they keep a strong command over the management of capacity and prices.Question 2: In what way does menu engineering equate to