yield management


The process of examining and factoring in consumer behavior to achieve the maximum amount of profit from a perishable good. Consumer behavior is examined to determine the correct price level to make the item enticing to the consumer. The idea is to coordinate timing, price, and consumer buying patterns to achieve the best return. The issue with yield management is that it can often result in unfair pricing for consumers. For instance, Joe may book a flight to California for $500 during the morning and Jane may book the same flight for $800 that evening.
Joe was able to receive the better price because the flight still had plenty of open seats and the airline was trying harder to entice customers to purchase a ticket.

Use yield management in a sentence

John was responsible for analyzing the yield management on all of their products to try and maximize revenue and profits.

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We were proud of our yield management, and the company had prospered greatly as a result of our painstaking efforts on that front.

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Business owners must ensure that they are making correct projections with regards to yield management, if they decide to invest most of their money into land in Detroit in the hopes that the land value in those areas will go up but unemployment in the areas they've purchased land in continues to go up, suddenly there is no longer a demand for their product.

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yield maintenance premium yield on invested assets