the student must thenpost 2 replies of at least 250 words by 11:59 p.m. (ET) on Sunday of the assigned Module:Week, except for Module 8: Week 8 in which the thread and replies must be submitted by 11:59p.m. (ET) on Friday. For each thread, students must support their assertions with at least 2 peer-reviewed journal articles in current APA format. The thread must include a reference list, andeach question/answer must be delineated under an APA heading. Each reply must demonstrate asubstantive discussion.
Reply # 1
In what ways can a retailer such as Nordstrom take advantage of revenue management opportunities?
Nordstrom can take advantage of revenue management opportunities using dynamic pricing, particularly because the store sells high fashion apparel, which is perishable (Chopra, 2019). The challenge with this is that Nordstrom must have some customers who are willing to pay full price as well as those customers who are looking for bottom dollar sales. Yang et al. (2022) proposed a framework for perishable products for when customer preferences is unknown prior to the selling season. The authors found in their model that if the customer preferences are known, the learning cost is “less than 2% of the optimal revenue in most cases” (Yang et al., 2022). Other strategies that Chopra (2019) suggest are to have a credible fixed price or to reduce the quantity initially offered.
What revenue management opportunities are available to a manufacturer? How can it take advantage of these opportunities?
Revenue management opportunities for manufacturers happen when they utilize differential pricing. For example, Ford Motor Company has multiple versions of their vehicles, a higher end, middle of the road version, and a basic model of the same model type. Ford has done this for years and realized that they could charge different prices based on the options available for each vehicle. However, Ford also utilizes dynamic pricing, particularly when they release the newest model of an existing vehicle and offer discounts on the previous year’s model. This creates the vehicle to become a perishable item (Chopra, 2019).
What revenue management opportunities are available to a trucking firm? How can it take advantage of these opportunities?
By using differential pricing revenue management opportunities, owners of a trucking firm can segment products based on how far in advance a customer will commit to and pay for transportation capacity. However, trucking owners have struggled to utilize the multiple shipping segments effectively, therefore Chopra (2019) suggests offering scheduled services as a mechanism to separate high-price and lower-price segments. There is difficulty in separating customers that commit early from those who want to use last minute services (Chopra, 2019). Questions arise when solving how much to charge for the segment and if there should be limited capacity allocated among the segments (Chopra, 2019). Once those questions are answered, differential pricing raises profits versus offering fixed pricing. Additionally, overbooking may also be used but only if another transportation service is available as a backup.
What revenue management opportunities are available to the owner of a warehouse? How can it take advantage of them?
Revenue management opportunities for an owner of a warehouse include leasing space to a large company, breaking down the space for leasing to smaller companies, leasing the space to a bulk buyer at a discount or saving space with a higher demand cost for small amounts of space which is not guaranteed (Chopra, 2019). An advantage of these options is that the warehouse still can make a profit during non-peak periods of time. Si et al. (2021) noticed how retail platforms have begun to invest large amounts of money into building their own warehousing systems and then who decide to rent out space to third-party retailers who do not have enough space themselves. Therefore, the authors introduced a heuristic model in which to review existing space with space to self-use and space for rent to which the authors found that their model had the potential to solve large and medium scale problems efficiently and effectively (Shi et al., 2021). Shi et al. (2021) realized a limitation was in rental policies and suggest further research on how to compare different rental policies with revenue problems. Additionally, overbooking may also be used but only if another warehouse is available as a backup.
Explain the use of outlet stores by retailers such as Saks Fifth Avenue in the context of revenue management. How does the presence of outlet stores help Saks? How does it help its more valuable customer, who is willing to pay full price?
With dynamic pricing, the use of outlet stores by retailers such as Saks Fifth Avenue allows the primary store to sell items at full price and then to transition items that are not selling well or are out of date to the outlet store where prices can be reduced. This allows Saks Fifth Avenue and stores like them, to still retain profits for items that may not have sold in the primary store. Another example of this is Coach, the retailer of luxury handbags, who often sell purses for hundreds of dollars but then shift items to their outlet stores where the item can be sold at a tenth of the price allowing customers to have the opportunity to afford the expensive handbag at a more reasonable price.
Demand for hairdressers is much higher over the weekend, when people are not at work. What revenue management techniques can be used by such a business?
Revenue management techniques that can be used for hairdressers would be to discount prices during off-peak times. Nail salons often do this, which allows for a discount of price for customers but also helps to reduce the number of customers who can shift their own schedules to get those prices. Hairdressers can also charge different prices for clients that see them more often than those who they may see once. This is called off-peak pricing (Chopra, 2019).
How can a golf course use revenue management to improve financial performance?
A golf course can use revenue management to improve the financial performance of the property by using differential pricing or by overbooking techniques. As identified earlier with hairdressers or nail salons, the golf course will charge full price for clients who can only play during peak hours and then can offer discounted prices for off-peak hours or when purchasing packages to play multiple times. The golf course will need to figure out cost benefits for all of these options to determine the prices of the discounts to maximize their profits (Chopra, 2019).
References
Chopra, S. (2019). Supply chain management: Strategy, planning, and operation (7th ed.). Pearson Education, Inc.
Shi, Y., Yu, Y., & Dong, Y. (2021). Warehousing platform’s revenue management: A dynamic model of coordinating space allocation for self-use and rent. European Journal of Operational Research, 293(1), 167-176.
Yang, Y., Chu, W.-L., & Wu, C.-H. (2022). Learning customer preferences and dynamic pricing for perishable products. Computers & Industrial Engineering, 171.
Reply # 2
In what ways can a retailer such as Nordstrom take advantage of revenue management opportunities?
Nordstrom has several ways to benefit from revenue management, especially given the fast-moving nature of its fashion inventory. One of the more common methods involves pricing adjustments throughout the product life cycle. Instead of using fixed pricing, Nordstrom can shift prices based on how quickly items sell in certain regions or among certain demographics. Talón Ballesteros et al. (2022) describe how retailers that move toward one-to-one pricing models often see improved performance without sacrificing brand value. That kind of approach may seem complicated, but with enough customer data, it becomes more manageable.
Another benefit involves better use of segmentation. Nordstrom already attracts a mix of full-price buyers and discount-driven shoppers. If they understand those segments clearly, they can time markdowns in a way that doesn’t harm the full-price shopper experience. Subying and Yoopetch (2023) pointed out that tailoring promotions based on customer behavior is one of the most effective ways to apply revenue management in retail. The key is not just offering discounts but offering them to the right people at the right time.
Inventory control is also part of the picture. Items that underperform in one location might still sell at full price in another. With a system that tracks local demand more closely, Nordstrom could avoid heavy markdowns altogether. The broader goal isn’t just to sell more, but to sell smarter—matching pricing and promotions with demand signals while preserving the luxury brand image that Nordstrom is known for.
What revenue management opportunities are available to a manufacturer? How can it take advantage of these opportunities? Manufacturers can use revenue management by influencing when and how customers place orders. For instance, they can offer small pricing incentives to shift demand away from peak production periods. This helps balance workload and improve resource use. Lan (2020) pointed out that price-based demand steering can lower congestion and reduce operating costs without sacrificing output. Another option is product segmentation. Some customers value speed or customization and are willing to pay more, while others prefer standard options. Subying and Yoopetch (2023) emphasized that offering tiered packages allows firms to increase margins without overextending operations. Contract pricing can also support predictability by rewarding clients who commit in advance. Altogether, these methods help manufacturers control demand timing, reduce variability, and capture more value per unit produced.
What revenue management opportunities are available to a trucking firm? How can it take advantage of these opportunities? In trucking, space and time are both limited. If a truck runs half-full, the revenue lost is hard to recover. This is where pricing can help. A firm might offer reduced rates for loads booked in advance or bundle return trips at a discount just to avoid running empty. That kind of adjustment doesn’t just improve margins and it also helps the schedule run more efficiently (Lan, 2020). Some firms also adjust prices by region or delivery speed. A rush delivery across state lines during peak hours isn’t the same as a flexible route booked a week ahead. Subying and Yoopetch (2023) mentioned that transport businesses can shift demand slightly through price, and even small changes matter. With enough tracking, these adjustments become part of how a firm stays competitive and fills more trucks.
What revenue management opportunities are available to the owner of a warehouse? How can it take advantage of them? Warehouse space isn’t always used the same way year-round. During busy seasons, demand for storage rises, but off-season space often sits unused. One option is to adjust pricing based on availability. Charging higher rates during peak months and offering discounts during slower periods helps balance demand across the year (Shanmugamani & Mohamad, 2023). Another strategy involves service flexibility. A warehouse can offer standard storage at one price and premium services, like temperature control or fast handling, at another. Subying and Yoopetch (2023) explained that offering options based on customer priorities can increase revenue without major operational changes. With the right software, owners can also track occupancy in real time and adjust terms as needed. These changes let a warehouse owner earn more from the same space while keeping clients satisfied.
Explain the use of outlet stores by retailers such as Saks Fifth Avenue in the context of revenue management. How does the presence of outlet stores help Saks? How does it help its more valuable customer, who is willing to pay full price?
Outlet stores give Saks a way to clear unsold inventory without discounting directly in their main stores. This separation keeps their high-end image intact. It also allows them to pull in more price-sensitive customers who wouldn’t usually shop at full price. Subying and Yoopetch (2023) found that maintaining brand positioning while offering tiered pricing environments can increase total revenue without damaging perception. Full-price shoppers benefit too. By removing discounted items from flagship stores, Saks preserves the premium experience those buyers expect. Talón Ballesteros et al. (2022) pointed out that differentiated pricing channels for example their outlets are a way to manage margins across segments. Instead of marking down luxury goods broadly, Saks uses outlets as a pressure valve, giving them flexibility without sacrificing their core value proposition.
Demand for hairdressers is much higher over the weekend, when people are not at work. What revenue management techniques can be used by such a business?
Hairdressers often see heavy weekend demand, while weekday slots go unused. One simple revenue management tool is to raise prices slightly for peak times like Friday and Saturday. This creates an incentive for flexible clients to book earlier in the week. Malheiros et al. (2025) observed that time-based pricing allows service providers to smooth out appointment flow and reduce bottlenecks. Another useful technique is weekday bundling. A salon might offer a discounted treatment or future credit to those who book during slower hours. Subying and Yoopetch (2023) explained that these targeted offers are effective when trying to shift demand without cutting prices across the board. With a few adjustments to how services are packaged and priced, a hairdresser can improve utilization and avoid the pressure of overbooking during weekends.
How can a golf course use revenue management to improve financial performance? Golf courses face fluctuating demand based on season, day of the week, and even time of day. One approach is to vary pricing by tee time. Morning and weekend slots can be priced higher, while afternoon or weekday rounds are offered at a lower rate. This helps spread demand across the schedule. Lan (2020) explained that adjusting prices based on time sensitivity is a common method for managing perishable inventory, which in this case is tee time availability. Bundled services also offer another way to improve financial performance. Offering packages that include carts, meals, or future play credits can boost revenue per customer. Subying and Yoopetch (2023) noted that bundling can raise the average transaction amount without overwhelming capacity. Golf courses that tailor prices and promotions to demand patterns often see stronger financial results throughout the year.
