Which term describes adjusting inventory and prices in response to demand fluctuations?

Which term describes adjusting inventory and prices in response to demand fluctuations?

• A. Yield management
• B. Fixed pricing
• C. Single-rate strategy
• D. Flat-rate pricing

Answer: (A)

Adjusting inventory and prices in response to demand fluctuations is yield management. In hospitality, this approach uses demand forecasts to set different price levels and control how much inventory is offered at each price, with the aim of maximizing revenue by selling the right inventory to the right customer at the right time and price. It relies on dynamic pricing and capacity control, such as allocating more inventory to higher-paying segments and offering discounts during slower periods. This differs from fixed or flat-rate pricing, which keeps prices the same regardless of demand, so those options don’t reflect responding to changing demand.

Adjusting inventory and prices in response to demand fluctuations is yield management. In hospitality, this approach uses demand forecasts to set different price levels and control how much inventory is offered at each price, with the aim of maximizing revenue by selling the right inventory to the right customer at the right time and price. It relies on dynamic pricing and capacity control, such as allocating more inventory to higher-paying segments and offering discounts during slower periods. This differs from fixed or flat-rate pricing, which keeps prices the same regardless of demand, so those options don’t reflect responding to changing demand.