供應鏈管理英文課件：Ch15 Pricing and Revenue Management in the Supply Chain

1、1-1,Chapter 15Pricing and Revenue Management in the Supply Chain,Supply Chain Management(3rd Edition),4-2,Outline,The Role of Revenue Management in the Supply Chain Revenue Management for Multiple Customer Segments Revenue Management for Perishable Assets Revenue Management for Seasonable Demand Rev

2、enue Management for Bulk and Spot Customers Using Revenue Management in Practice Summary of Learning Objectives,4-3,What is Revenue Management?,Revenue management is the practice of differential pricing to increase supply chain profits A strategy that adjusts prices based on product availability, cu

3、stomer demand, and remaining duration of the sales season will result in higher supply chain profits Revenue management, also called yield management, and sometimes smart pricing, is a technique to optimize revenue from a fixed, but perishable inventory,4-4,Revenue Management,Newsvendor problem:Maps

4、 demand into capacity,Revenue Management:Maps capacity into demand,4-5,What is Revenue Management?,Is revenue management possible for Airline tickets Cruise travel Restaurants Hospitals LTL trucking companies Apartment rental Incoming MBA class Vending machines,4-6,Revenue Management and Vending Mac

5、hines,Coca-Cola announces that it is considering vending machines that will boost prices during hot weather. “Coca-Cola is a product whose utility varies from moment to moment. In a final summer championship, when people meet in a stadium to enjoy themselves, the utility of a chilled Coca-Cola is ve

6、ry high. So it is fair it should be more expensive. The machine will simply make this process automatic.”,Douglas Ivester, Chairman and CEO,4-7,Conditions for Revenue Management,The value of the product varies in different market segments Airline seats: leisure versus business travel The product is

7、highly perishable or product waste occurs Fashion and seasonal apparel High tech products Demand has seasonal and other peaks Cruise travel The product is sold both in bulk and on the spot market Owner of warehouse who can decide whether to lease the entire warehouse through long-term contracts or s

8、ave a portion of the warehouse for use in the spot market,4-8,Why Revenue Management?,Success stories American Airlines increased annual revenue by over $1 billion through revenue management Marriott hotels increased annual revenue with $100 million through revenue management National Car Rental was

9、 saved from liquidation through revenue management Canadian Broadcasting Corporation increased revenue with $1 million per week,4-9,Airfare example,p,1000,1000,800,600,400,200,q,800,600,400,200,Choose the fare that maximizes the area (revenue) of the rectangle,4-10,Airfare example,1000,1000,800,600,

10、400,200,800,600,400,200,Choose the fare that maximizes the area (revenue) of the rectangle,Maximum revenue = 500*500= $250,000,Consumer surplus,Unaccommodated demand,p,q,4-11,Airfare example,1000,1000,800,600,400,200,800,600,400,200,Choose the fare that maximizes the SUM of areas of the rectangles,E

11、conomy class,Business class,Maximum revenue = 333*(333 + 667) = $333,000,p,q,4-12,Airfare example,1000,1000,800,600,400,200,800,600,400,200,Choose the fare that maximizes the SUM of areas of the rectangles,Economy class,Economy plus class,First class,Maximum revenue = 200*(800+600+400+200)= $400,000

12、,Business class,p,q,4-13,Airfare example,1000,1000,800,600,400,200,800,600,400,200,Maximum revenue = $500,000,Perfect price discrimination,Charging a different price to a different buyer for the same product without any true cost differential to justify the different price,p,q,4-14,Is Revenue Manage

13、ment Price Discrimination?,The same product sold at different times for different prices is not necessarily price discrimination, because at different times. The production or distribution costs may be different Inventory costs were incurred to keep the product in stock until a later time Consumers

14、value products differently at different points in time The product value may change over time, such as perishable or maturing or seasonal products, fashion goods, antiques. Interest is earned if product is sold at an earlier time Locking sales in early reduces uncertainty,4-15,Revenue Management for

15、 Multiple Customer Segments,If a supplier serves multiple customer segments with a fixed asset, the supplier can improve revenues by setting different prices for each segment What price to charge each segment? How to allocate limited capacity among the segments?,Prices must be set with barriers such

16、 that the segment willing to pay more is not able to pay the lower price,4-16,Revenue Management,Hotels, airlines, opera houses hope this tool will help them maximize sales and profits “The real beneficiary of revenue management has been the consumer”,Clearly, customers for which revenue management

17、has decreased the cost of air travel, have benefited from revenue management. Could customers for which revenue management has increased the cost of air travel, also have benefited from revenue management?,4-17,What is Revenue Management?,p,1000,1000,800,600,400,200,800,600,400,200,q,p,1000,1000,800

18、,600,400,200,800,600,400,200,q,4-18,Example 15-1: Pricing to multiple segments,A contract manufacturer has identified two customers segments for its production capacityone willing to place an order more than one week in advance and the other willing to pay a higher price as long as it can provide le

19、ss than a weeks notice for production. The customers that are unwilling to commit in advance are less price sensitive and have a demand curve d1 = 5,000 20p1. Customers willing to commit in advance are more price sensitive and have a demand curve of d2 = 5,000 40p2. Production cost is c = $10 per un

20、it. What price should the contract manufacturer charge each segment if its goal is to maximize profits?,4-19,Example 15-1: Pricing to multiple segments,d1 = 5,000 20p1,4-20,Example 15-1: Pricing to multiple segments,d1 = 5,000 20p1,Profit,p - c,4-21,Pricing Multiple Segments,Assume that the demand c

21、urve for segment i is given by di = Ai Bipi The goal of the supplier is to price so as to maximize profits Max (pi c)(Ai Bipi),Profit,4-22,Pricing Multiple Segments,The optimal price for segment i is given by pi = Ai/2Bi + c/2,4-23,Example 15-1: Pricing to multiple segments,For segment 1: pi = Ai/2B

22、i + c/2pi = 5,000/(2*20) + 10/2 = $130 Profit (pi 10)(5,000 20pi) = (130 10)(5,000 20*130) = $288,000 For segment 2: pi = Ai/2Bi + c/2pi = 5,000/(2*40) + 10/2 = $67.50 Profit (pi 10)(5,000 40pi)= (67.5 10)(5,000 40*67.5) = $127,650,Total profit $415,650,4-24,Example 15-1: Pricing to multiple segment

23、s,If total capacity is limited to 4,000 units, what should the contract manufacturer charge each segment? For segment 1: p1 = $130 Demand d1 = (5,000 20p1) = 2,400 For segment 2: p2 = $67.50 Demand d2 = (5,000 40p2) = 2,300 Total demand = 2,400 + 2,300 = 4,700,Total demand exceeds production capacit

24、y of 4,000,4-25,Pricing Multiple Segments,The goal of the supplier is to price so as to maximize profits Max ki=1 (pi c)(Ai Bipi) Subject to:ki=1(Ai Bipi) Qpi 0,Maximize profits,Production capacity,Price,4-26,Example 15-1: Pricing to multiple segments,If the contract manufacturer were to charge a si

25、ngle price over both segments, what should it be?,d1 = 5,000 20p1,d2 = 5,000 40p2,d = (5,000 20p) + (5,000 40p) = 10,000 60p,4-27,Example 15-1: Pricing to multiple segments,For segment 1 and 2: p = Ai/2Bi + c/2p = 10,000/(2*60) + 10/2 = $83.33 Max (p c)(A Bp) Max (p 10)(10,000 60p) = (83.33 10)(10,0

26、00 60*83.33) = $366,650,Differential pricing raises profit from $366,650 to $415,650,4-28,Revenue Management for Multiple Customer Segments,If a supplier serves multiple customer segments with a fixed asset, the supplier can improve revenues by setting different prices for each segment What price to

27、 charge each segment? How to allocate limited capacity among the segments?,What if demand is uncertain?,4-29,The Park Hyatt Philadelphia,118 King/Queen rooms. Hyatt offers a pL= $128 (low fare) targeting leisure travelers. Regular fare is pH= $181 (high fare) targeting business travelers. Demand for

28、 low fare rooms is abundant. Let DH be uncertain demand for high fare rooms. Assume demand for the high fare (business) occurs only within a few days of the actual stay,How much capacity should Hyatt save for the higher priced segment?,4-30,Allocating Capacity to a Segment Under Uncertainty,Basic tr

29、adeoff between committing to an order from a lower-price buyer or waiting for a high-price buyer to arrive later on Spoilage occurs when the capacity reserved for higher-price buyers is wasted because demand from the higher-price segment does not materialize Spill occurs if higher-price buyers have

30、to be turned away because the capacity has already been committed to lower-price buyers,4-31,Allocating Capacity to a Segment Under Uncertainty,Expected revenue = sales probability x sales price,Never sell a unit of capacity for less than the expected revenue,$128 $181.00 = 1.0 x 181,$128 $162.90 =

31、0.9 x 181,$128 $144.80 = 0.8 x 181,$128 $126.70 = 0.7 x 181,4-32,Allocating Capacity to a Segment Under Uncertainty,RH(CH) = Prob(demand from higher-price segment CH) x pH,Expected revenue = sales probability x sales price,Never sell a unit of capacity for less than the expected revenue,$126.70 = 0.

32、7 x 181,4-33,Allocating Capacity to a Segment Under Uncertainty,RH(CH) = Prob(demand from higher-price segment CH) x pH,Expected revenue = sales probability x sales price,Never sell a unit of capacity for less than the expected revenue,$128 $126.70 = 0.7 x 181,4-34,Allocating Capacity to a Segment U

33、nder Uncertainty,CH = F-1(1 pL/pH, DH, H),Prob(demand from higher-price segment CH) = 1 pL/pH,CH,pL/pH,1 pL/pH,4-35,Example: Allocating Capacity to a Segment Under Uncertainty,Assume that demand for rooms at the high rate is normally distributed with mean 102 and standard deviation 20.8. Also assume

34、 that the high rate is 181 dollars and low rate (discount rate) is 128 dollars Determine probability that expected marginal revenue of higher rate class will exceed marginal revenue of lower rate class pL = 128 pH = 181 1 pL/pH = 1 128/181 = 0.2928 Convert that probability into the number of rooms N

35、ORMINV(1 pL/pH, DH, H) = NORMINV(0.2928, 102, 20.8) = 91,Hence, 91 rooms should be reserved for the high rate class,4-36,Example 15-2 Allocating Capacity to Multiple Segments,ToFrom Trucking serves two customer segments. One segment (A) is willing to pay $3.50 per cubic feet but wants to commit with

36、 only 24 hours notice. The other segment (B) is willing to pay only $2.00, but is willing to commit to a shipment with up to one week notice. With two weeks to go, demand for segment A is forecast to be normally distributed, with a mean of 3,000 cubic feet and a standard deviation of 1,000. How much

37、 of the available capacity should be reserved for segment A?,4-37,Example 15-2 Allocating Capacity to Multiple Segments,4-38,Example 15-2 Allocating Capacity to Multiple Segments,ToFrom Trucking serves two customer segments. One segment (A) is willing to pay $3.50 per cubic feet but wants to commit

38、with only 24 hours notice. The other segment (B) is willing to pay only $2.00, but is willing to commit to a shipment with up to one week notice. With two weeks to go, demand for segment A is forecast to be normally distributed, with a mean of 3,000 cubic feet and a standard deviation of 1,000. How

39、much of the available capacity should be reserved for segment A?,How should ToFrom change it decision if segment A is willing to pay $5 per cubic foot?,4-39,Example 15-2 Allocating Capacity to Multiple Segments,4-40,Revenue Managementfor Perishable Assets,Any asset that loses value over time is peri

40、shable Examples: high-tech products such as computers and cell phones, high fashion apparel, underutilized capacity, fruits and vegetables Two basic approaches: Vary price over time to maximize expected revenue Overbook sales of the asset to account for cancellations,4-41,Revenue Managementfor Peris

41、hable Assets,Overbooking or overselling of a supply chain asset is valuable if order cancellations occur and the asset is perishable The level of overbooking is based on the trade-off between the cost of wasting the asset if too many cancellations lead to unused assets and the cost of arranging a ba

42、ckup if too few cancellations lead to committed orders being larger than the available capacity,4-42,Revenue Managementfor Perishable Assets,p = price at which each unit of the asset is sold c = cost of using or producing each unit of the asset b = cost per unit at which a backup can be used in the

43、case of asset shortage Cw = p c = marginal cost of wasted capacity Cs = b c = marginal cost of a capacity shortage O* = optimal overbooking level s* = Probability(cancellations O*) = Cw / (Cw + Cs),4-43,Revenue Managementfor Perishable Assets,If the distribution of cancellations is known to be norma

44、l with mean mc and standard deviation sc then O* = F-1(s*, mc, sc) = NORMINV(s*, mc, sc) If the distribution of cancellations is known only as a function of the booking level (capacity L + overbooking O) to have a mean of m(L+O) and std deviation of s(L+O), the optimal overbooking level is the solut

45、ion to the following equation: O = F-1(s*,m(L+O),s(L+O) = NORMINV(s*,m(L+O),s(L+O),4-44,Example 15.5,Cost of wasted capacity = Cw = $10 per dress Cost of capacity shortage = Cs = $5 per dress s* = Cw / (Cw + Cs) = 10/(10+5) = 0.667 mc = 800; sc = 400 O* = NORMINV(s*, mc,sc) = NORMINV(0.667,800,400)

46、= 973 If the mean is 15% of the booking level and the coefficient of variation is 0.5, then the optimal overbooking level is the solution of the following equation: O = NORMINV(0.667,0.15(5000+O),0.075(5000+O) Using Excel Solver, O* = 1,115,4-45,Revenue Managementfor Seasonal Demand,Seasonal peaks o

47、f demand are common in many supply chains Examples: Most retailers achieve a large portion of total annual demand in December (A) Off-peak discounting can shift demand from peak to non-peak periods Charge higher price during peak periods and a lower price during off-peak periods,4-46,Revenue Managem

48、ent forBulk and Spot Customers,Most consumers of production, warehousing, and transportation assets in a supply chain face the problem of constructing a portfolio of long-term bulk contracts and short-term spot market contracts The basic decision is the size of the bulk contract The fundamental trade-off is between wasting a portion of the low-cost bulk contract and paying more for the asset on the spot market Given that both the spot market price and the purchasers need for the asset are uncertain, a decision tree approach as discussed in Chapter 6 should be used