E. Andrew BOYD
Chief Scientist and Senior Vice President
PROS Revenue Management

Research Questions in Revenue Management and Pricing

The presenter will elaborate upon research questions encountered in revenue management and pricing applications that could benefit from a longer term, academic research focus. Among the topics covered will be:

Pricing. Pricing as practiced in industry is often far-removed from many academic pricing models. Both existing business practices and academic models bear examination. Examples of industry pricing are discussed in an effort to explain why, for better or for worse, many industry practices exist, and what practices could benefit from better modeling. The often confusing relationship between revenue management and pricing is also addressed.

Integrated forecasting and optimization. Forecasting and optimization are typically treated separately in revenue management applications. Yet, the inventory limits or prices established as a result of optimization impact observed demand, and therefore the ability to forecast. Examples are presented to clarify open research questions.

Performance metrics. One of the biggest long term impediments to the broad adoption of revenue management and pricing is the existence of acceptable performance metrics. Business issues surrounding performance metrics are discussed, as are inherent practical problems with most metrics.

Time permitting, additional topics that will be addressed include alliances and cooperative agreements, descriptive modeling, and auctions.