Abstract
Revenue management (RM) refers to the collection of strategies and tactics firms use to scientifically manage demand for their products and services. It has gained attention recently as one of the most successful application areas of operations research (OR). The practice has grown from its origins as a relatively obscure practice among a handful of major airlines in the postderegulation era in the United States (circa 1978) to its status today as a mainstream business practice with a growing list of industry users, ranging fromWalt Disney Resorts to National Car Rental. The economic impact of RM is significant, with increases in revenue of 5% or more reported in several industry applications of RM systems. Professional practice and research in the area is also expanding. There are now several major industry RM conferences each year, and published research on the methodology of RM has been growing rapidly. This chapter provides an introduction to this increasingly important subfield of OR. It is based on excerpts from our book The Theory and Practice of Revenue Management.