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Essay / Research Paper Abstract
This 3 page paper looks at how and why the concept of the service profit chain can be important in revenue management as a part of the approach to revenue management. The bibliography cites 6 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TErmservice.rtf
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Unformatted sample text from the term paper:
are different approaches that may be taken in the way that profit is created but revenue management will be a part of the planning and is likely to play a
role in the way strategic management takes place. The use of tools such as revenue management and the service profit chain can aid with an understanding of how a
firm can increase profits. Revenue management is the way a firm undertakes it operation in order to maximise profits through the way
revenue is created, it is of particular interest where there are perishable or time fixed services, where there is a limited potential to ain revenues after a set period of
time (Talluri and van Ryzin, 2005). For example, an air carrier can sell tickets for a flight until a few hours before it takes off, but once it is in
the air any unsold seats are a lost opportunity. Revenue management is used in the airline industry in order to try and fill the seats maximising profit, this often involves
the use of dynamic pricing with the use of complex forecasting models (Nellis and Parker, 2006). Dynamic pricing in order to maximise profits is only a part of the process,
the airlines use dynamic pricing in order to stimulate demand when it is low and to skim it when it is high. However, there are other aspects of operations that
may be used to increase value and demand, the concept of the service profit chain may be of great benefit. The concept
of the service profit chain is that there is a direct link between employee loyalty and satisfaction and way in which service is provided to customers, where there is a
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