The Revenue Management Theory

Revenue Management Theory is a strategic approach businesses use to optimize income by adjusting prices based on demand, customer behavior, and market conditions. It involves predicting how many customers will buy and at what prices, then setting prices dynamically to maximize revenue. This practice is common in industries like airlines, hotels, and rental services, where capacity is limited and demand fluctuates. By effectively managing prices and inventory, companies can sell the right product to the right customer at the right time and price, ensuring they make the most profit from their available resources.