From an operational perspective, yield management is most effective under which of the following circumstances?
A) Demand cannot be segmented by customer.
B) Inventory is perishable.
C) Fixed costs are low, and variable costs are high.
D) The customer is a "captive" of the system.
E) The firm doing yield management is very profitable.

Question

Quizplus · Accepted Answer

Yield management is most effective when there is perishable inventory, meaning that unsold units cannot be sold at a later time. This creates a sense of urgency for customers to book at the right time, allowing the company to maximize revenue. Other factors such as low fixed costs, high variable costs, or captive customers may also contribute to yield management effectiveness, but they are not the primary factors. The profitability of the firm is irrelevant to the effectiveness of yield management.

From an Operational Perspective, Yield Management Is Most Effective Under