From an operational perspective, yield management is least effective under which of the following circumstances?
A) Demand can be segmented by customer.
B) The product can be sold in advance.
C) Demand is highly variable.
D) Fixed costs are high, and variable costs are low.
E) Demand is stable and close to capacity.

Question

Quizplus · Accepted Answer

Yield management is designed to maximize revenue by adjusting prices based on demand, and it is most effective when demand is highly variable and can be segmented by customer. However, when demand is stable and close to capacity, there is little room for price adjustments and yield management becomes less effective. Fixed costs being high and variable costs being low can actually increase the effectiveness of yield management, as it allows for more pricing flexibility. The ability to sell the product in advance also supports yield management by providing more time to adjust prices based on demand.

From an Operational Perspective, Yield Management Is Least Effective Under