RM Moment #10:

RM, like supply-chain management (SCM), are the only demand management processes that optimize their functions. RM maximizes revenue and SCM minimizes costs. It is the use of both at the same time that can lead to the greatest possible profit.

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RM Moment #9:

The civil aviation industry possesses an inflexible production. It was exactly this characteristic that led Robert “Bob” Crandall, president of American Airlines in the 1970s, to develop a demand management process that was very different from the traditionally used. This process was called Yield Management, in reference to the metric widely used in aviation, Passengers Yield, which would later be called Revenue Management..

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RM Moment #8:

RM is a process that is based on a socio-technical system. One of the major flaws in implementing RM in an organization is to take only into account the technical system part and disregarding the socio-organizational system component of it.

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RM Moment #7:

The optimal price is obtained when marginal revenue equals marginal cost. In companies with flexible production, this is relatively easy to calculate compared to companies with inflexible production. This is one of the biggest challenges in companies with inflexible production, or, if you prefer, candidates for the implementation of RM, because it is necessary to consider the marginal opportunity cost.

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RM Moment #6:

RM is an economic anomaly (or exception), because many businesses with inflexible production and high financial leverage (aviation, hotels, rent-a-car, etc...) even operating in an environment of strong competition (perfect competition), the prices/marginal revenue practiced are far or very far from being equal to their marginal cost, thus contradicting the economic principles of perfect or quasi-perfect competition. In this sense, the economic paradox that exists in companies capable of applying RM is that they tend to operate in market structures of strong competition (perfect or quasi-perfect competition), but applying, in practice, many economic principles typical of monopolies (e.g. price differentiation) and/or oligopolies (e.g. product differentiation).

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RM Moment #5: 

Economic theory states that profit is only maximized when marginal cost is equal to marginal revenue. However, there are businesses, such as those mentioned in RM Moment #4, that, given their restrictions in their spatial and/or temporal dimensions, this objective is impossible. Because businesses with this type of characteristics tend to have high financial leverage, that is, low variable costs and high fixed costs. That said, the economic theory of profit maximization as a rule does not apply to companies with inflexible production, that is, companies that are candidates for the application of Revenue Management. This is why the economic strategy to apply is to increase the net contribution margin by maximizing revenue, while keeping variable costs as low as possible and not applying the traditional theory of profit maximization, which, and I would say curiously, it would certainly lead the company to bankruptcy.

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 RM Moment #4: 

RM Moments #4: RM is a demand-management process, essential in businesses whose production is inflexible. It is the case of airlines, hotels, rental car, tour operators, restaurants, cruise ships, ferry-boat lines, passenger railways, cargo freight, theatres and cinemas, sporting events, casinos, retailing, advertising space, natural-gas storage and distribution, machinofacture and manufacture industry, electricity production and distribution.  

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RM Moment #3: 

Traditional economic theory is based on the principle that managing demand by the supply side must be based on Flexible Production as a way of responding to the variability and uncertainty of that same demand. However, there are businesses whose production is totally inflexible (hard inflexibility) or relatively inflexible (soft inflexibility), thus a new approach would be required. Revenue Management is to date the only strategic demand management decision-making process, focused on the revenue, designed to manage the constraints that inflexible production creates.

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RM Moment #2: 

RM is a strategic decision-making process of demand management by the supply side focused on revenue.

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RM Moment #1: 

"Why do some companies have successful RM implementation programs, while others struggle with theirs?" (Liberman, 2003)

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