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Ticket Fares to Las Vegas!
 ÷ield Management
° A set of strategies used in the service industry
to 2
2  from operations.

° | | 
 of ÷ield Management

° The  




° To the  
 2

° At the  2

° For the  

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° Gistory:
- Late 1970¶s: ÿ    


- Late 1980¶s: Gotel Industry

° -oal of ÷ield Management:

- 
2    2 

- 
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° rften used with the  

22

 |haracteristics of ÷ield
Management
° Perishable Inventory
° Relatively Fixed |apacity
° Gigh Fixed |osts, Low Variable |osts
° Advance Reservations
° Time Variable Demand
° Appropriate |ost and Pricing Structure
° Segmentable Markets
 ÷ield Management
° Perishable |ommodity

- Airplane Seats

- Gotel Rooms

- Rental |ars

- |ruise Ship |abins

 ÷ield Management Strategies
As demand exceeds supply Increase Rates to Maximize Profits

As supply exceeds demand Decrease Rates to Maximize rccupancy

 ÷ield Management Threshold |urve
Ñ
Reservation

Ñ
Threshold |urve

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 ÷ield Statistic
actual rooms revenue
÷ield =
potential rooms revenue
`  2 
  
 


is the percentage of income that could be secured if 100%

of available rooms were sold at  
 
 ÷ield Exercise
Gotel AB| has 500 rooms available, it sells 200
rooms at $85 with a rack rate of $100.

‡ What¶s the yield of Gotel AB|

actual rooms revenue

÷ield =
potential rooms revenue
(Every room sold at full rack rate)
 rccupancy versus ÷ield

number of rooms occupied

rccupancy Rate ]
number of rooms available

actual rooms revenue

÷ield =
potential rooms revenue
(Every room sold at full rack rate)
 rccupancy versus ÷ield
‡ Gotel AB| has 500 rooms available, it
sells 275 rooms at $80 and 125 rooms
at $120 rack rate. What is the
occupancy rate What is the yield

‡ Gotel X÷
also has 500 rooms available,

it sells 125 rooms at $80 and 275 rooms
at $120 rack rate. What is the
occupancy rate What is the yield
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