Revenue management can be defined as a data-driven, computerized system to support the tactical pricing of perishable assets at the micro-market level to maximize expected revenues from sunk investments in capacity. More broadly, revenue management includes product design at the strategic level (e.g. coming up with travel restrictions and ancillary services that comprise an airline fare class as well as upgrade and upsell policies to be used), and inventory control of fare classes at the operational level (e.g. opening and closing fare classes in response to remaining capacities). While inventory control for the fare classes is the main lever in revenue management, dynamic pricing is about selecting optimal price paths over the sales horizon. Pricing analytics, goes beyond dynamic pricing to include the study of consumer surplus and welfare, and issues related to competition and on-line learning. In this brief introduction to Revenue Management and Pricing Analytics, I want to highlight research opportunities for potential graduate students that may want to join CUHK-SZ.
Guillermo Gallego is the Liu Family Professor Emeritus at Columbia University, and the Crown Worldwide Professor Emeritus at the Hong Kong University of Science and Technology. He is an INFORMS Fellow (2012), MSOM Distinguish Fellow (2013), HKIE Fellow (2016), and an international scholar that is widely recognized as one of the pioneers of modern Dynamic Pricing. He is the recipient of the 2011 Historical Award of the INFORMS Revenue Management & Pricing Section, the 2012 INFORMS Practice Award, the 2016 INFORMS Impact Prize, and the INFORMS Revenue Management & Pricing Section Prize (both in 2005 and 2021). He is the only scholar in Operations Management to win best paper awards from both Management Science and Operations Research, the two top journals in his field. Professor Gallego was the Chairman of the Industrial Engineering and Operations Research (IEOR) department at Columbia University (2002-2008) and the Head of the department of Industrial Engineering and Decision Analytics at the Hong Kong University of Science and Technology (2016-2022). Professor Gallego has been a devoted mentor of Ph.D. students, placing them at top institutions including Fudan University, the Chinese University of Hong Kong, Shenzhen, and the Shanghai University of Finance and Economics in China; Stanford University, the University of Michigan, Johns Hopkins University, and the University of Texas in Dallas in the United States; The University of Toronto and McGill University in Canada, and The London School of Economics in the United Kingdom.