Question

Every product and every unit of capacity can be sold both in bulk and in the spot market. Revenue management increases profits by finding the right portfolio of long-term and spot-market customers.

a) True
b) False

Answer 1

Revenue management involves finding the right balance between long-term and spot-market customers to maximize profits.

Step-by-step explanation:

The statement says that revenue management increases profits by finding the right portfolio of long-term and spot-market customers. This means that a company can sell its products both in bulk (to long-term customers) and in the spot market (to one-time customers or on-demand). By balancing the sales between these two markets, a company can maximize its revenue and ultimately increase its profits.

For example, a clothing manufacturer can sell its products in bulk to retail stores as a long-term customer. At the same time, it can also sell its products directly to consumers through its online store or pop-up shops in the spot market. This combination of long-term and spot-market customers allows the company to reach a wide range of customers and generate more revenue.

Therefore, the statement is true.