Revenue Management In Hrm

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Revenue Management Revenue Management (RM), also known as yield management, is rarely used in the restaurant industry (Kimes, Wirtz and Noone, 2002). Revenue Management has been started in the airline industry in the early 1980’s and later on extended in the hotel industry (Cross, 1998). It has been defining as well as allocating the right product, for the right customer, at the right time, for the right price (Kimes, Wirtz and Noone, 2002). “Right” in this definition is the essential element of RM and involves achieving the most revenue whilst delivering the most value or use to the customer (Kimes, Wirtz and Noone, 2002). Although many restaurants apply various types of RM practices, the application has been mostly tactical for example lunch…show more content…
These industries are characterized by fixed capacity, perishable inventory, high overhead cost, low variable costs, predictable demand and varying customer willingness to pay. Revenue management allows these capacity-constrained industries to maximize the revenue they generate. The restaurant industry also possesses these characteristics. Although hotels offer room rates that change according to demand or in relation to customers' length of stay (Kimes,2004), restaurants can offer different menu prices, in the form of discounting or premium pricing. For example during low demand, restaurants can offer discounts such as: happy hour, early birds or coupons, during peak time they can limit their offer to special (higher priced) menu’s…show more content…
First, it is suggested that an exploratory and/or empirical study based upon server efficiency in casual restaurants be conducted so that managers will be able to accurately forecast meal duration, taking into account meal period, party size, and server efficiency. Additionally, a study should be conducted to investigate the impact of atmospheric factors on meal duration, such as current volume inside of the restaurant, temperature, lighting and music, and the psycho- logical connection that customers feel they have with their server. Finally, research is lacking on the impact of wine service on meal duration. As identified by Wansink et al. (2007), the consumption of wine during a meal as thought to increase the consumption of food during a meal. Therefore, the effect of wine service being offered could significantly impact the duration of a meal within a
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