Understand the concept of yield management systems and targeting technology. Yield management systems use complex mathematical software to profitably fill unused capacity. The software uses techniques such as discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity. These systems are used in service and retail businesses and are substantially raising revenues. The use of Internet cookies and targeting software enables online retailers to offer different pricing and promotional offers to online buyers based upon their online shopping and browsing habits.
1 Why are so many companies adopting yield management systems?
2 Explain the relationship between supply and demand and yield management systems.
3 Why is targeting technology so effective?