Revenue Management Theory

Revenue Management Theory involves analyzing and forecasting customer demand to optimize the pricing and availability of a product or service. By understanding patterns—such as when demand is high or low—companies can adjust prices dynamically to maximize revenue. For example, airlines increase ticket prices during busy travel times and offer discounts when seats are remaining unsold. The goal is to sell the right product to the right customer at the right time and price, ensuring maximum profitability while meeting customer needs efficiently.