Revenue Management from a Business-Economics Perspective
This chapter highlights the short-term impact of technical inefficiency on company profitability. In the short-term analysis, technical efficiency is the necessary, but not sufficient, condition for achieving economic efficiency.
Focusing on the creation of value, the author describes how, in the short-term, the management link between technical efficiency and profitability is guaranteed by the implementation of RM tools. RM is a methodology or management technique able to support companies in maximizing profitability through the sale of the right product, to the right customer, at the right time, in the right place, and at the right price.
RM systems play an important role in the business as methodology able to drive the expected demand through the correlation between the product/delivered service, the customer, the sales time (even if not necessarily the supply of the service), the place, and the price to be paid. In RM systems, the maximization of profitability is achieved through technical efficiency and maximization of customer willingness to pay.
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