Visualizing revenue management trade-offs via a two-dimensional pareto curve showing measures of overall volume or share versus measures of overall profitability or adjusted revenue
A system and method for visualizing the trade-off between overall production and/or sales of a portfolio of products and a resulting aggregate contribution margin (ACM). The method includes solving an optimization model, or other suitable operation, that has an objective function that describes the...
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Zusammenfassung: | A system and method for visualizing the trade-off between overall production and/or sales of a portfolio of products and a resulting aggregate contribution margin (ACM). The method includes solving an optimization model, or other suitable operation, that has an objective function that describes the ACM across a portfolio of products to determine the price, sales and production levels of the products that maximize the ACM for a particular set of constraints. The optimization model is solved for increasing aggregate sales levels for those constraints. The relationship between the aggregate sales level and the aggregate ACM is then graphed, and the optimization model is solved for different sets of constraints and increasing sales. The resulting graphs are analyzed to determine which constraints maintain sales volume while maximizing ACM, maintain ACM while maximizing sales volume, maximize ACM and maximize sales volume regardless of impact on ACM. |
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