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 There’s a Plenty of Room at the Top!

Revenue Management also known as yield management is rapidly growing field in various capacity constraint service domains such as hotels, airlines, logistics etc. It has impelled Mudransh Analytics(www.mudransh.com) to provide sophisticated and comprehensive RM solutions using mathematical techniques and domain knowledge of various industry experts.

Revenue Management

Revenue Management (RM) is a process of selling the right inventory to the right customer at the right time and for the right price to maximize revenue.

Opportunities for Revenue Management arise when
 · Inventory is perishable

  •  · Capacity is fixed
  •  · Market segmentation based on willingness to pay is possible
  •                                                                    · Sales are made in advance
  •                                                                   · High fixed costs and low marginal servicing costs

RM combines knowledge about market segmentation for pricing along with advanced statistical analysis to increase average revenue per unit of available capacity. It maximizes revenue by:

  • · Forecasing Demand 
  • · Demand-sensitive differential pricing
  • · Optimal allocation of inventory

Various hotels such as Intercontinental Hotels Group (IHG), Carlson, Hyatt have successfully implemented Revenue Management systems.

Mudransh Analytics

Mudransh Analytics is dedicated to provide consultancy services and software solutions in the rapidly growing area of Revenue Management for a seller of a product or service by addressing fundamental selling decisions:

  • · Structural
  • · Price
  • · Quantity

Mudransh Analytics focus on delivering value through services and solutions based on

  • · Mathematical models and industry expertise
  • · Robust optimization and statistical engines

It uses distinguished techniques like Decision Tree, Scanty Data Modelling, Extreme Event Modeling, Garch, ANN, ARIMA. It has expertise in standard tools such as SAS, SPSS, R, CART, MATLAB, Ilog.

Applications of RM

Following are some of the industries which use RM:

Hotels

Very large diversity in the types and operations of hotels results into variations in RM practices. They maximize average revenue per unit of available capacity. IHG is the first large scale enterprise implementation of price optimization in the hospitality industry.

RM is implemented in hotels as follow:

  • · Market  is segmented into
  1. o Price sensitive and price insensitive customers
  • · Demand is forecasted using
  1. o Statistical techniques based on historical data to forecast daily, weekly, monthly  demand for rooms
  1. o Event based forecasts for days of week, holidays, festivals etc.
  • · Differential Pricing and Inventory Allocation is conceded based on
  1. o Arrival day and time
  1. o Length of stay
  1. o Type of room and view
  1. o Early check-in and late check-out time etc

Typical Hotel Revenue Management System is designed as shown:

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