Answer :
Final answer:
The criterion not needed for effectively utilizing revenue management is having low fixed costs and high variable costs; this is because revenue management thrives in conditions with high fixed costs and low variable costs.
Explanation:
The option that is NOT a criterion needed for an industry to unlock the full potential of revenue management is c. Low fixed costs and high variable costs. This is because revenue management typically relies on the ability to forecast demand and adjust prices accordingly, which is facilitated by having high fixed costs and low variable costs. High fixed costs give a firm the incentive to maximize revenue through price optimization since the products are perishable and the capacity is often fixed. Variable costs that are low relative to fixed costs mean that each additional unit sold contributes significantly to covering those fixed costs, enhancing the potential for revenue management.
Revenue management is particularly useful in industries with a perishable product, such as hotel rooms or airline seats, where unsold inventory represents a lost opportunity. Additionally, it requires a fixed-capacity environment, where the amount of product available for sale cannot be increased on short notice, and demand that is varied yet predictable, which allows for strategic pricing decisions. Lastly, the industry should generally have high fixed costs, meaning that the cost structure is not heavily affected by volume changes in the short term.
