From an Operational Perspective, Yield Management Is Most Effective Under

question 56

Multiple Choice

From an operational perspective, yield management is most effective under which of the following circumstances?

• A) Demand cannot be segmented by customer.
• B) Inventory is perishable.
• C) Fixed costs are low, and variable costs are high.
• D) The customer is a "captive" of the system.
• E) The firm doing yield management is very profitable.

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Definitions:

Stock Price

The current market price at which a share of a company's stock can be bought or sold.

Black-Scholes Value

A model used to estimate the theoretical price of options and certain other financial instruments.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other assets at a specified price within a specific time period.

Volatility

The degree of variation of a trading price series over time, often used to gauge the risk in investments.