The Ride Sharing Firm Uber Uses Dynamic Pricing, Which Results

question 26

True/False

The ride sharing firm Uber uses dynamic pricing, which results in higher fares during busy times and lower fares during less busy times. This is an example of revenue management.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a certain activity.

Variable Manufacturing Overhead

Costs that fluctuate with production volume, such as utilities and materials used in the production process.

Direct Labor-Hours

The total number of hours worked by employees who are directly involved in the manufacturing process.

Fixed Manufacturing Overhead

Costs in manufacturing that do not change with the level of production output, such as rent, salaries of permanent staff, and depreciation of factory equipment.