Welcome to the Yield Management Game (YMG) from the Marketing Department at the Daniels College of Business (University of Denver).
The YMG is a simulation in which you, as a player, compete against others in an attempt to maximize revenue in the booking of an airline flight. This is intended to give you fun, hands-on experience in the techniques of yield management.
This document is intended for the game player. Facilitators should refer, instead, to the “The Yield Management Game.doc” document that is distributed with the game.
You will compete against other players to optimize revenue (and, therefore, profit) for a single flight using a 2-fare structure: • Non-refundable fare: Paid at booking time. You keep this revenue whether the passenger takes the flight or not. • Refundable fare: Paid at booking time. Refunded later if the passenger cancels or does not show up for the flight.
Costs are assumed to be fixed, so by maximizing revenue, you maximize profit.
The game is played over a number of equal length periods in the year prior to the flight, each one closer to the day of the flight and each one with (generally) increasing demand. A standard demand curve, as illustrated in the following, is utilized by the game to determine the number of interested people at any given time during that year:
Your responsibility is to set prices and limits for each fare before each period commences.
The facilitator will then inform you of how many bookings you obtained in that period for each fare, as well as how many potential passengers were turned away due to lack of availability.
You are allowed to overbook the flight (up to a pre-specified limit), but you will be penalized for each passenger that gets bumped on the day of the flight.
Historically, not all passengers show up for the flight.
You are penalized (via a...