Which of the Following Statements Is True of Yield Management

question 23

Multiple Choice

Which of the following statements is true of yield management systems?

• A)They determine the availability of product substitutes in industries that are experiencing rapid change.
• B)They use software that employs techniques such as discounting early purchases and limiting early sales at these discounted prices.
• C)They predict necessary service levels required to achieve revenue goals.
• D)They determine whether it is financially more feasible to buy a new product or to repair a broken one.

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Definitions:

Present Value

The contemporary value of a future monetary sum or cash flow stream, calculated with a set rate of return.

Compounded Semi-annually

The process of adding interest to the principal sum of a deposit or loan every six months, so that each subsequent interest calculation is based on the original principal plus all accumulated interest.

Ordinary Annuity

A series of equal payments made at equal intervals of time, with the first payment occurring at the end of the period.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.