Using yield management techniques for airlines and hotels can seem unfair in some factors, such as possibly affecting customer loyalty with range of pricing, but overall its ethical considering its been a consistent strategy that business have used to increase revenue. "The airlines might be the champion advocates for yield management policies, but these practices are all too common in the hotel industry as well. Marriott Hotels credits these practices for an additional revenue of $100 million per year as well" (Yield Management In the Airline Industry), it goes to show how successful these businesses have been with yield management, even with customers that can look at it badly, there are other last minute customers that will still take what they can get. Very similar with hotels, this industry wants to maximize occupancy, adapt to market changes, and have competitive advantage. Hotels can look to manage their inventory effectively with the rooms but also allow overbooking to maximize what they can achieve. Its ethical to have discounts for Senior Citizens in McDonalds and Beauty Salons, many within that age mainly start looking for deals and get drawn in by them, it does create more revenue for these business too because it can allow them to have loyal customers with already fair prices.
Using yield management techniques for airlines and hotels can seem unfair in some factors, such as possibly affecting customer loyalty with range of pricing, but overall its ethical considering its been a consistent strategy that business have used to increase revenue. "The airlines might be the champion advocates for yield management policies, but these practices are all too common in the hotel industry as well. Marriott Hotels credits these practices for an additional revenue of $100 million per year as well" (Yield Management In the Airline Industry), it goes to show how successful these businesses have been with yield management, even with customers that can look at it badly, there are other last minute customers that will still take what they can get. Very similar with hotels, this industry wants to maximize occupancy, adapt to market changes, and have competitive advantage. Hotels can look to manage their inventory effectively with the rooms but also allow overbooking to maximize what they can achieve. Its ethical to have discounts for Senior Citizens in McDonalds and Beauty Salons, many within that age mainly start looking for deals and get drawn in by them, it does create more revenue for these business too because it can allow them to have loyal customers with already fair prices.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Here is the question: Is it ethical for the airline and hotel industries to use Yield Management techniques? Is it ethical for Mcdonald's and Beauty Salons to use Senior Citizen pricing in their offerings?
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Transcribed Image Text:Using yield management techniques for airlines and hotels can seem unfair in some factors, such as possibly affecting customer loyalty with range of pricing,
but overall its ethical considering its been a consistent strategy that business have used to increase revenue. "The airlines might be the champion advocates for
yield management policies, but these practices are all too common in the hotel industry as well. Marriott Hotels credits these practices for an additional
revenue of $100 million per year as well" (Yield Management In the Airline Industry), it goes to show how successful these businesses have been with yield
management, even with customers that can look at it badly, there are other last minute customers that will still take what they can get. Very similar with hotels,
this industry wants to maximize occupancy, adapt to market changes, and have competitive advantage. Hotels can look to manage their inventory effectively
with the rooms but also allow overbooking to maximize what they can achieve. Its ethical to have discounts for Senior Citizens in McDonalds and Beauty
Salons, many within that age mainly start looking for deals and get drawn in by them, it does create more revenue for these business too because it can allow
them to have loyal customers with already fair prices.
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