Chapter 5

Revenue Management and Capacity Analysis

Two topics with special relevance for revenue management are capacity analysis, especially the capacity model developed by Computer Aided Manufacturing–International (CAM-I), and the theory of constraints, as set forth by Eli Goldratt in The Goal and subsequent publications. This chapter discusses capacity analysis; the theory of constraints is presented in chapter 6.

Considerations of capacity are central to revenue management, which is about generating additional revenue (selling unused capacity) in a profitable way.

Background: Capacity Management

Concern with the analysis, costing, and management of capacity has been a long-standing issue in accounting, finance, and management. McNair and ...

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