Yield management

Yield management seeks to maximize revenue on a perishable product (thus it is often also called revenue management). One example of such a product is airline seats. Their availability is restricted by a specific day, time, and flight; if not used when available, they perish. Yield management also deals with the optimal pricing of a limited number of products when there are different product/price mixes. The pricing of ski weekends by a lodge and of conventions by a hotel are examples. The prices of these products change over time according to their availability throughout the seasons. Yield management, then, contains elements of mathematical and artificial intelligence problems, with the solution based on data provided by transactional applications.

In the hotel industry, rooms wear out and must be refurbished on a fairly regular schedule, but the rates charged for the rooms differ depending on season, lead time to rental, number of nights' stay, promotions, and so on. Similarly, car...