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INFORMS Revenue Managment and Pricing Section

The INFORMS Revenue Management and Pricing (RMP) Section promotes the use of operations research and analytics to study how to better match the supply of a good or service with its demand, often as a process happening over time, i.e., selling the right product to the right customer at the right price at the right time. While pricing and capacity control decisions are emphasized by operators of many traditional industries (e.g., airlines, hotels, and car rentals), recent developments in the sharing economy and in online marketplaces allow the control of a host of additional variables, such as information structure, liquidity, matching mechanism, and terms of trade.

The RMP Section supports innovative research and applications in traditional industries with the purpose of leveraging our understanding of increasingly complex market conditions and promotes the spread of best practices. At the same time, recognizing the new analytics developments, the Section is broadly interested in research and applications that enhance our understanding of how markets can be better designed and operated, and of how market participants interact to determine market outcomes. Our interests encompass a wide range of applications spanning retail analytics, online advertising, commodity markets, transportation-on-demand, and cloud computing, among others, and a mix of approaches including modeling, theory, and empirics, employing tools drawn from game theory, auctions and mechanism design, optimization, stochastic modeling, econometrics, statistics, and behavioral modeling.

To that end, our goals are:


 * To advance the development and application of operations research and analytics in the field of Revenue Management and Pricing in both traditional and innovative settings;
 * To promote the development and application of Revenue Management and Pricing in new industries;
 * To encourage the exchange of information among practitioners, users, and researchers in Revenue Management and Pricing; and more broadly, Marketplace Analytics, and
 * To promote high professional standards in the application of Revenue Management and Pricing.

About Revenue Management and Pricing
Revenue Management and Pricing (RMP) is a multidisciplinary research area that combines operations research, stochastic optimization, economics, marketing, behavioral science and data analytics to solve problems related to the management and pricing of scarce and perishable resources. Fundamentally, RMP is an applied discipline which derived its value from the business results it achieves and has had a transforming impact on the transportation (airlines, railway, rental car), hospitality (hotels, cruise lines, casinos) and retail (apparel, consumer goods) industries. At the same time, RMP has strong elements of an applied science and provides a rigorous mathematical framework to optimize the various levers of control that companies have at their disposal including capacity management, dynamic pricing, product bundling, assortment optimization, auctions and allocation mechanisms, and so on.

Revenue Management and Pricing is also an evolving discipline that is rapidly expanding its scope to a broad range of applications fueled by the rise of online marketplaces and Internet exchanges such as media and Internet advertising, sharing economy markets, labor and procurement platforms, healthcare exchanges, among others. The unique operational characteristics of these online marketplaces have led to a new and more sophisticated generation of RMP models that rely on search and matching algorithms, rating and review systems, pricing and assortment personalization tools and real-time learning capabilities, to name a few.

History of the RMP Section
When the Revenue Management and Pricing Section was originally formed in 1999, it was simply the Revenue Management Section. Revenue Management had its roots in the airline industry and American Airlines in particular, so revenue management talks were typically relegated to one or more sessions in the Airline Section track of the then biannual INFORMS conference, along with sessions on schedule planning, crew pairing and the like. As revenue management was rapidly developing in new fields – hotel rooms and rental cars to name two of the most obvious examples – individuals doing research outside of the airline industry were without a home. It seemed time to form a new section focused on revenue management.

Even the name revenue management was relatively new. When the practice was developed at American it went by the name yield management. Revenue management was a term introduced by non-airline practitioners, in part because “revenue” was more self-explanatory and in part because it allowed the discipline to express an identity free of the airline industry. For a period of time it was almost comical as various people held to different names for what amounted to the same thing. One group wanted to use the name profit management but it never gained any real traction. Eventually the name revenue management largely supplanted yield management even in the airline industry.

Kevin Geraghty who was then in charge of revenue management OR at Delta Air Lines did some initial looking into starting the section, but when he grew busy Andy Boyd moved forward with the process. There was initially some pushback from the MS&OM Society, which was growing rapidly at the time and wanted to incorporate a revenue management specialization in the society. Ultimately the revenue management section went its own way, which proved to be a good decision by all parties. As Andy Boyd's recalls, "the original business meeting of the revenue management section at the annual INFORMS conference had perhaps a half-dozen people in attendance – myself included".

Revenue management and pricing have always been intertwined, and within a couple of years it seemed appropriate to include pricing in the name. Many people outside the traditional travel and transportation world equated revenue management with the newly evolving area of dynamic pricing. The alternative name “Pricing and Revenue Management” was also proposed by some members (arguing that it rolled off the tongue more easily and more people were familiar with pricing than revenue management). But the core constituency of the section consisted of revenue management people, and appending the name pricing after revenue management proved relatively easy to do without objection from elsewhere in INFORMS. Thus was born the Revenue Management and Pricing Section.

The complete list of past chairs and board members of the RMP Section can be found here.

Activities

 * Conferences
 * Awards
 * Webinars
 * Journals