Postgraduate Course: Revenue Management (CMSE11449)
||College||College of Arts, Humanities and Social Sciences
|Credit level (Normal year taken)||SCQF Level 11 (Postgraduate)
||Availability||Not available to visiting students
|Summary||This course introduces formal models in revenue management to analyse strategies for optimising revenue, encompassing three areas of decision problems -- quantity decisions, pricing decisions, and structure decisions.
The key issues in revenue management are classified in the following thee areas of decision problems:
1) Quantity decisions: How to allocate inputs and outputs to different segments and channels in the market over time; When to enter the market or to withhold products from the market
2) Pricing decisions: How to set prices for different segments and channels; how to set price or mark down over time
3) Structural decisions: Which selling format to choose, i.e., fixed prices, negotiations, or auctions; How to design the selling mechanism or platform
To address those questions in revenue management, this course introduces formal models to analyse markets and marketing strategies. In particular, to manage strategic buyers/customers and incomplete information, this course adopts mechanism design approaches.
The course topics will be chosen among:
- Dynamic pricing and allocation
- Sequential search and consumer search
- Auction design and dynamic auctions
- Two-sided markets and platform design
- Mechanism comparison: posted prices, negotiation, auctions
Student Learning Experience
Students will learn basic models and concepts from 5 two-hour lectures for 5 weeks. In Week 8 and Week 10, they will be able to learn how to extend /develop the basic models from the additional tutorial sessions. Problem solving skills will be developed through completing their assignments.
Entry Requirements (not applicable to Visiting Students)
||Other requirements|| For Business School PG students only, or by special permission of the School. Please contact the course secretary.
Course Delivery Information
|Not being delivered|
On completion of this course, the student will be able to:
- Understand and critically validate basic models for analysing/managing revenue.
- Solve the models to critically interpret the results and evaluate the practical implications.
- Identify the rationale and the limitations of the models and the approaches.
- Extend the models to apply them to realistic situations.
- Identify problems and issues in revenue management to communicate/present solutions and suggestions to decision makers efficiently.
|Suggested Reading includes|
- Gershkov, A., & Moldovanu, B. (2014). Dynamic Allocation and Pricing: A Mechanism Design Approach. MIT Press.
- Salant, D. J. (2014). A primer on auction design, management, and strategy. MIT Press.
- Phillips, R. L. (2005). Pricing and revenue optimization. Stanford University Press.
|Graduate Attributes and Skills
Students will develop skills such as:
- the ability to build models to support decision making in managing/optimising revenue;
- the ability to critically validate models for managing/optimising revenue;
- the ability to interpret results and suggest best solutions for decision-making models;
- the ability to understand the intuition behind models and solutions.
Subject Specific Skills
Students will gain:
- an appreciation of methods and solution involved in decision modelling;
- experience in applying models to realistic/hypothetical revenue management situations;
- experience in analysing/interpreting the results and the implications of the models.
By the end of the course students will be expected to:
- be able to plan and carry out analyses based on construction and solution of appropriate models;
- be able to employ analytical and problem-solving skills;
- show that they can report results in a concise way.
|Course organiser||Dr Joosung Lee
Tel: (0131 6)51 1375