Case summary:
Many companies including Company OM tried to implement dynamic pricing in their ticketing system. The dynamic pricing based on the popularity and the number of games is as follows:
Popularity rating of opponent | Number of games | Price |
Tier I | 3 | $187 |
Tier II | 3 | $170 |
Tier III | 4 | $85 |
Tier IV | 6 | $75 |
Tier V | 14 | $60 |
Tier VI | 9 | $44 |
Tier VII | 6 | $40 |
Average | 45 | $68 |
Company OM has a capable revenue management technique. It follows three different types of pricing strategy, which are the setting price during the beginning of the season and do not change throughout the season, setting a price based on the popularity of an opponent, and pricing the tickets based on the projected demand and the changing based on the actual market demand.
Person P and Person D of Company OM use different tools to change the seat price based on the demand. Company OM would provide offer prices and seats at a prime rate in the existing games.
To determine: The change in the profit contribution for the 45-game season change.
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Operations Management
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