Title: Optimal yield policy with infiltration consideration

Authors: Shaul P. Ladany, Fee-Seng Chou

Addresses: Department of Industrial Engineering & Management, Ben Gurion University of the Negev, P. O. Box 653, Beer-Sheva 84105, Israel. Department of Decision Sciences, National University of Singapore, 10 Kent Ridge Crescent, 0511 Singapore

Abstract: An integer programming model is formulated for determining the optimal market segmentation and pricing policy for fixed-capacity service industries to maximize their yield, given a set of defined potential market segments with known demand curves. The model incorporates infiltration of customers from high priced to low priced market segments. Using a real-life-size numerical example from a hotel management environment, the model was solved by easily accessible spreadsheet software on a personal computer.

Keywords: yield management; market segment; optimal number of segments; infiltration between segments.

DOI: 10.1504/IJSTM.2001.001587

International Journal of Services Technology and Management, 2001 Vol.2 No.1/2, pp.4-17

Available online: 04 Jul 2003 *

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