Revenue Management and Dynamic Pricing in the Supply Chain
Thursday, September 26, 2002 - 11:00am - 11:50am
Andy Boyd (PROS Revenue Management)
Supply chain management has historically focused on the planning, scheduling, and operational challenges encountered when supplying physical goods to the market. Equally important yet frequently neglected is the demand side of the equation, an area where the service industries have focused intensively. In particular, the travel and transportation industries have pioneered many highly successful demand management practices. Most notable among these practices is revenue management, which applies forecasting and optimization methodologies to address pricing and/or finished product inventory management. We discuss the role of revenue management and dynamic pricing in the overall value chain, discuss the underlying mathematical concepts that drive the value proposition, and highlight challenges.