News - Dash reports on Revenue Management for Retail conference

Dash were pleased to take part in the recent Revenue Management for Retail conference, held at the Cafe Royal in London on 21 November.

A wide range of people attended and there were some very interesting presentations from industry analysts, software and solution vendors, and retailers.

Revenue management, or merchandise planning and price optimisation strategies, is the strategy of maximising profits through setting and managing the price and availability of goods over time. Under the name of yield management, it has been applied with great success in the airline industry, where for example, the price of an airline ticket varies depending on how far in advance it is bought, the current predicted demand for that particular flight, and the flexibility of the ticket. It is now beginning to be used in more general retail contexts, but the opportunity has largely yet to be fully realised.

Where does Dash come in? As Carrie Johnston of Forrester explained, you need the advanced maths and algorithms as part of the solution. The price of a particular item at a particular time may depend on a number of factors, and with 10,000 items to consider, making all those decisions requires an optimisation component. Bob Garner, of Manugistics, speaking about a yield management project for Thomson Holidays (a division of TUI UK Ltd), explained that their system uses LP to set day to day prices to maximise revenues less variables costs while ensuring that demand and supply constraints are not violated.

For more details on the conference, see http://www.rm4r.com/.