To use revenue management strategies, a business should have which combination of costs?

A) high variable and high fixed

B) low variable and high fixed

C) high variable and low fixed

D) low variable and low fixed

E) either A or B

Answer: B) low variable and high fixed

Industries in which revenue management techniques are easiest to apply are those where:

A) use tends to be predictable, and pricing tends to be fixed.

B) use tends to be predictable, and pricing tends to be variable.

C) use tends to be uncertain, and pricing tends to be fixed.

D) use tends to be uncertain, and pricing tends to be variable.

E) All of the above, i.e., there is no difference.

Answer: B) use tends to be predictable, and pricing tends to be variable.

Revenue (or yield) management is best described as:

A) a situation where management yields to labor demands.

B) a situation where the labor union yields to management demands.

C) a process designed to increase the rate of output.

D) allocation of scarce resources to customers at prices that will maximize revenue.

E) management's selection of a product mix yielding maximum profits.

Answer: D) allocation of scarce resources to customers at prices that will maximize revenue.

Revenue management is MOST likely to be used in which one of the following situations?

A) a fast food restaurant with wide demand fluctuations during the day

B) a dental clinic that wants to fill its appointment book

C) a firm with a good counterseasonal product mix

D) a shipping company that can change its fleet size easily

E) an airline attempting to fill "perishable" seats at maximum revenue

Answer: E) an airline attempting to fill "perishable" seats at maximum revenue