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A revenue management approach to demand management and order booking in assemble‐to‐order manufacturing
Author(s) -
Harris Frederick H. deB.,
Pinder Jonathan P.
Publication year - 1995
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/0272-6963(95)00029-1
Subject(s) - revenue management , yield management , revenue , revenue assurance , order (exchange) , revenue model , demand management , business , build to order , service (business) , business process management , computer science , industrial organization , operations research , marketing , economics , microeconomics , production (economics) , finance , business process , work in process , engineering , macroeconomics
Revenue management is an order acceptance and refusal process that employs differential pricing strategies and stop sales tactics to reallocate capacity, enhance delivery reliability and speed, and realize revenue from change order responsiveness in order to maximize the revenue from pre‐existing capacity. While previously considered primarily as a tool of service operations, revenue management has considerable potential for assemble to order (ATO) manufacturing environments. Increasing demand for customer responsiveness has created service‐oriented manufacturing environments suitable for the application of revenue management methods. This paper applies revenue management concepts and techniques to ATO manufacturing environments and presents models for optimal pricing and capacity decisions.