The EconomicSupply andDemand

Introduction to Revenue ManagementPart 1

Understanding and Managing the RevenuePart 2

Revenue Management in Airline IndustryPart 3

(Week

Number) /

(Date/Month)/

(Topics)

Part one: Introduction to Revenue Management

1 21 2558 Introduction to the course

2 28 2558 Revenue Management

Part two : Understanding and Managing the Revenue

3 4 2558 The Economy and Supply and Demand: Group 2, 9

4 11 2558 The Market: Group 6, 8

5 18 2558 Segmentation: Group 3,4

6 25 2558 Pricing and Value Perception: Group 1,5

7 2 2558 Revenue Manager: Group 7

8 9 2558 Review for Mid-Term Exam

14 2558

Quantity

Price

0

8

2 8

2

- Price at 10 will have no demand. - An increase in price from 6 to 8 will cause a reduction of quantity sold from 8 to 4 units. - If price is zero, the quantity will be 10 units.- Slope of demand demonstrates a change of Q when p changes by 1 unit. (-1)

10

10

(Demand)

4

6

Quantity

Price

0

8

2 8

2

?10

10

(Demand)

(price)

Quantity

Price

0

8

2 4

6

10

8

Shift of Demand Curve ?

1. 2. 3. 4. 5.

10

Quantity

Price

0

8

2 4

6

10

8

Shift of Demand Curve Revenue ?

10

LEFT ? RIGHT ?

: Line BN305Friday/ 5501112215/LEFT

Supply

0

10

102

6Slope of supply indicates a change of Q in response to a unit change in price (0.5)

(supply)

Quantity

Price

Supply

0

10

102

6

(supply) supply ?

(price)

Price

Quantity

Supply

0

10

102

6

(supply) supply ?

1. 2. Productivity3. 4. 5.

Price

Quantity

Quantity

Price

Q*

P*

The equilibrium price and quantity are set where demand intersects supply

(Demand) (Supply)

AA AirlinesDemand & Supply

AA Airline: Demand Curve

Price Qty

900 180

1230 150

1590 120

1810 100

2030 80

Price Qty

900 180

1230 180

1590 180

1810 180

2030 180

AA Airline: Supply Curve

? demand curve 180 Revenue AA Airline /flight

Price Qty

900 180

1230 150

1590 120

1810 100

2030 80

: Line BN305Friday/ 5501112215/35200

AA Airline: Yield

Price D. Qty S. Qty Opt.RM. RM

900 180 180 0 0

1230 150 180 0 0

1590 120 180 0 0

1810 100 180 100 181000

2030 80 180 80 162400

630 180 343,400

From: 900 x 180 = 162,000

To: (2080 x 80) + (1810 x 100) = 343,400

+ 181,400

AA Airline: Shift of Demand Curve

Price Qty

900 180

1230 150

1590 120

1810 100

2030 80

2000