BUS429 Pricing Analytics and Revenue Management

• Topics

  The content of this course has two main parts:

  The goal of part 1 is to discuss the main principles of pricing and revenue management:

  • Understand it as a corporate process.
  • Review the economic principles of pricing.
  • Understand the key role of price differentiation (segmentation).
  • Learn to price when supply is constrained.

  Part 2 focuses on the techniques of three of the major applications of pricing and revenue management:

  • Revenue Management: this is one of the major applications of PRO. This section focuses on the strategies and tactics that some industries use to manage allocation of their capacity over time to maximize revenue.
  • Markdown management: this section focuses on the schedule of price discounts to maximize the return from the inventory.
  • Customize pricing: this section focuses on determining the discount levels to provide to each costumer in order to maximize the expected profitability of a deal.

• Learning outcome

  This course provides students with the tools to understand the tactical function of pricing and revenue optimization. Specifically, in this course the students will learn how to use management science analytical techniques to set prices in complex and dynamic environments.

  After completing this course, students:

  (Knowledge)

  • Understand the tactic role of pricing and revenue optimization within a strategic pricing plan in relevant business contexts.
  • Understand the economics foundation of pricing theory.
  • Understand the conditions for the application of revenue management.
  • Have an overview of the industries where pricing and revenue optimization has provided competitive advantages.

  (Skills)

  • Are able to identify potential applications of pricing and revenue optimization in new industries.
  • Are able to use analytical tools to model real-world pricing decision-making processes.
  • Are able to implement pricing solutions.

  (General competences)

  • Are capable to write reports to communicate their findings clearly and concisely, and in a rigorous form to provide business insights to diverse audiences

• Teaching

  Lectures, computer workshops, team project.

• Required prerequisites

  Elementary Statistics, Probability, and Optimization.

• Requirements for course approval

  The three written home-works must be submitted by their respective deadlines in order to hand in the final written project.

• Assessment

  Three written home-works, in groups of two students (or one student), where the students will solve specific questions related to the course content (50%).

  Final written project (50%) - in groups of two students (or one student). 

  Homework 1 will be given to the students at the end of week 3 of the semester and they have to return the answers at the end of week 4.

  Homework 2 will be given to the students at the end of week 6 of the semester and they have to return the answers at the end of week 7.

  Homework 3 will be given to the students at the end of week 9 of the semester and they have to return the answers at the end of week 10.

  All elements have to be taken in the same semester.

• Grading Scale

  A - F.

• Computer tools

  MS Excel, R.

• Literature

  Phillips, R. (2005) Pricing and Revenue Optimization. Stanford University Press.

  Tudor, B. and Ferguson, M. (2013) Segmentation, Revenue Management and Pricing Analytics, Routledge.