How do airlines decide when to increase ticket prices? Should a hotel charge less per night for a long stay than a short one? Why do some software companies bundle very different products together? How should a fashion retailer decide when do start discounting clothes? Why do so many discounted rates end in “.99”? How should companies estimate future demand for their products?
These are only a small sample of the operational and pricing challenges all businesses regularly face. These challenges are often addressed individually and in isolation but, in reality, all of these decisions interact with each other. This class looks at the demand management challenges faced by companies in various industries and provides an introduction to the tools that can be used to address these challenges. Specific topics covered include (subject to change)
- Basics of price optimization,
- Static and dynamic price optimization,
- Market segmentation,
- Customized pricing,
- Non-linear pricing,
- Markdown pricing,
- Overbooking strategies,
- Consumer Choice Modeling
Prerequisites: An understanding of both probabilistic and deterministic modeling.
Senior Lecturer in the Discipline of Decision, Risk and Operations; Director Center for Pricing and Revenue Management and Business Analytics Initiative