Forecast/forecasting revenue management

Revenue management is focused on demand forecasting - aggregated and disaggregated - demand distribution models or arrival processes to... 

Revenue management is not a phrase-based management concept but a discipline based on quantitative methods such as statistics, simulation and optimization as well as systems including steps for data collection, estimation and forecasting, optimization and sales control (Cross 2001, pp. 17-18). 

The research community has responded to the E-Business challenge. Despite the infamous dot-com bust in the early 2000 s, scores of research initiatives, workshops, technical papers, and special journal issues have been devoted to the subject. E-Business remains a critical subject not only in the research community, but also in corporate boardrooms. Instead of the revolution that would replace every facet of business, the rise of E-Business might be viewed as the emergence of new economic intermediaries that offer opportunities for innovation. These new intermediaries offer different means to respond to market demands (e.g., Internet vs. traditional channels), to facilitate sourcing, procurement, and price discovery (e.g., electronic auctions), and to develop new mechanisms for coordination and execution (e.g., dynamic pricing, revenue management, and collaborative forecasting). 

National Car Rental (Geraghty and Johnson, 1997) Time series forecasting models with seasonality was used by National Car Rental to forecast customer demands for cars and estimate revenues. They were used in the company s revenue management system. 

Implement a forecasting process. The foundation of any revenue management system is the forecasting function. By forecasting, we do not mean obtaining an estimate that is... 

As experts in pharmaceutical marketplace analytics and projection methodologies, forecasters can assess the commercial potential of the development compound and work closely with the marketer/brand manager to develop a prescription and revenue projection for the NCE. Forecasters are often technically oriented and their role is to provide a numerical forecast for the compound, not focus on the strategic implications of their analysis. However, their interaction with the other members of the brand plan team often clarifies the assumptions associated with the disease marketplace and the place of the NCE within it. 

Companies also find, as they mature, that it is difficult to get the complement of metrics necessary to view the supply chain as a system. There are six metrics in supply chain management that are tightly woven with intrinsic trade-offs. These metrics are asset utilization, days of inventory (or inventory turns), forecast accuracy, customer service (on-time delivery of orders shipped complete), cost of goods, and revenue growth. 

Using what-if analysis, demand forecasters can shape unconstrained demand based on current sales and marketing activities as well as external factors affecting demand. This includes weather, special events, and economic conditions to optimize volume and revenue while minimizing marketing investment. Figure 3.7 illustrates the four key steps in the market-driven demand management process. 

The plan calls for a sales price of 100 with an attractive gross margin before distribution costs of 40. Distribution costs add 10 per unit to the cost. It is likely that the supply chain manager is measured on whether the costs of distribution meet the 10 expectation. The first year sales forecast calls for 100,000 units, producing expected revenues of 10 million. However, this is an innovative product, so actual demand is uncertain. Demand, in the case of the widget, may in fact be significantly more or less than the forecast of 100,000 units. 

I Reverse logistics application provider [List of six companies] and other leading global companies turn to [Company] to reduce cost, increase revenue, and secure customer loyalty through our proven service parts management supply chain solutions. Sample results include 53% reduction in inventory 67% reduction in cycle time 60% decrease in forecast error 40% increase in revenue 30% decrease in transportation cost... 

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