Concept explainers
Make the case for, and then against, this pricing system. Does the general public seem to accept revenue management? What would happen if you overheard the person in front of you in line getting a better room rate at a Hilton Hotel? How do customers manipulate the airline systems to get better fares?
Case summary:
In the recent days, airline passengers stand in numerous lines and uses taxiway due to air-traffic problems and lack of open gates. Gripes travelers in the aero plane gets annoyed if they find the person sitting next to them paid lower fare. They were against this pricing system.
To determine: For and against report about the pricing system.
Explanation of Solution
Determine the details about the pricing system and its effect on public:
Revenue management is crucial from the airline’s point of view. Revenue management is the most critical method that can be followed in hotels, universities, and restaurants. The revenue management technique in hotels, restaurants, and universities helps to approach various market segments.
However, from customers’ point of view, it is the sense of unfairness. They would be annoyed if they travel in the same plane that has the people who paid half as much as they paid.
If Person X overheard that the person in front of his line getting had better room rate, it would annoy him. He might think that there is an unfairness of treating its customers. Most of the customers would be against the revenue management technique and mentioned pricing strategy.
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Chapter 13 Solutions
Principles Of Operations Management
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