Revenue Management, Implementation and Preconditions Article

Revenue Management, Implementation and Preconditions - Article Example Studies have cited that the RM has evolved over 30 years ago, in the early 70s Littlewood and Rothstein have explored the revenue management practice in the airlines and hotels. In 1978, during the deregulation in the airline industry, the importance of RM was ascertained as an implementation of it can increase the revenue above 5%. Therefore the scope of RM was restricted to capacity scheduling and distribution. After illustrating the definition and the evolution of Revenue management the chapter will move on to the literature review. The report will address the various tools of revenue management in the traditional and non-traditional industries and the importance of such tools in an efficient management system. In the end, the study will comprise of the critical comparison and reflection with respect to both the industries and a summary of the entire project addressing the recommendation. The report works on the yield management system and its implementation in both the aviation a nd the restaurant industries. Initially, it looks at the preconditions and the implementation process. Then it will take a deeper review of the implementation of YM through models and the impacts of the external factors and SWOT analysis of such system within the two different industries.  After the American Deregulation Act that loosened the price restriction in  the USA, the airline companies had started to plan their own prices. The main objective of Airline industry is to maximize profit by regularizing pricing and availability of its single perishable commodity like seats. RM is immensely profitable for airlines because it can generate high profits. The process of revenue management covers fare setting and seat inventory management. The management involves taking the decision on the number of seats to be reserved for late booking.