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Revenue optimization
What is yield management and how does it differ from revenue optimization?
Yield management focuses on selling each unit of finite capacity, like airline seats, hotel rooms, and ad impressions, at the highest obtainable price before it expires. It relies on detailed demand curves and strict inventory controls. Revenue optimization is broader; it balances price, promotion, and product mix across the whole business, whether capacity is limited or not. Therefore, yield management is a specialized branch of revenue optimization, tuned for perishable inventory where the cost of an empty seat is an irreversible loss.
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