NYU Stern School of Business

Undergraduate College

MULT-UB.0030.001 (C70.0030): Revenue Management and Pricing

Spring 2013

Instructor Details

Caldentey, Rene



After class

KMC 8-77

Teacher's Assistant:

Kalyan Talluri

Dept. of Economics and Business

Universitat Pompeu Fabra, Spain



Course Meetings

R, 6:00pm to 9:00pm

Tisch T-200



Final Exam:  An in-class, open book/notes test during our last meeting.



Course Description and Learning Goals

Revenue Management and Pricing (RMP) focuses on how firms should combine production and product design decisions with pricing and product availability policies across different selling channels in order to maximize performance and profitability. RMP offers great value to companies selling seasonal/perishable products under uncertain and changing market conditions.

The philosophy, strategy and techniques are widely used in the following industries:

For example, American Airlines estimates that its pricing and revenue management practices have generated more than $1.4 billions in additional incremental revenue over a three-year period.

 Building on a combination of lectures, case studies, industry presentations and data-driven projects the course develops a set of methodologies that students can use to identify and develop opportunities for revenue optimization in different business contexts. The course is relevant to students who are interested in understanding what it takes to implement a Revenue Management system and how to use it as a Business Analytics tool for capacity planning, product design, pricing and revenue optimization. The course is also relevant to students with an interest in consulting, as the restless evolution of information technologies and software development has fueled the rapid growth of commercial RMP systems and related consulting services.

 RMP counts toward the concentration in Statistics and the track in Business Analytics



Course Pre-Requisites

 OPMG-UB.0001: Competitive Advantage from Operations

The course requiries some familiarity with basic Operations Management and Statistics subjects such as linear programming, inventory management, regression and time series analysis. Some background in microeconomics is useful as well, but is not essential. 


Course Outline

Session 1 (Thursday Feb 14th): Introduction


      Chapter 1 of PRO-textbook

      Chapter 1 in TVR-textbook (handout available in the course website)


Session 2 (Thursday Feb 21th): The Theories of Pricing


      Chapters 2, 3 & 4 PRO-textbook.

      Case 1: Vertigo-U2


Session 3 (Thursday Feb 28th): Pricing Policies in Action


      Chapters 5 and 10 in PRO-textbook

      Chapter 5 in TVR-textbook (handout available in the course website)

      Case 2: TBA


Sessions 4 & 5 (Thursdays March 7th and 14th): An Operational Model of RM


      Chapters 6 and 7 in PRO-textbook

      A Note on the Newsvendor Model: Inventory Planning for Short Lifecycle Items (available on course website)

      Article “Implementing Restaurant Revenue Management” (available in course website)

      Case 3: Berkshire Hathaway

Submit Group Homework 1


Sessions 6 & 7 (Thursdays March 28th and April 4th): Network RM


      Chapters 8 and 9 in PRO-textbook

      Introduction to Linear Programming (available on course website)

      Case 4: TNG (discussed in Session 6, to be handed in Session 7)


Session 8 (Thursday April 11th): Implementing a RM System


      Appendix A in PRO-textbook, 

      Case 5: Bloomingdale


Session 9 (Thursday April 18th): Demand Forecasting and Data Analysis


Session 10 (Thursday April 25th): Competitive Factors

Read: Chapter 12 in PRO-textbook

Submit Group Homework 2


Session 11 (Thursday May 2nd): Industry Applications

Case 6: TBA


Session 12 (Thursday May 9th): New Directions in Revenue Management


Final Exam: This is an in-class, open book/notes test. It will include calculations and short answers and responses. The material on the test is based primarily on class lectures and discussions. Calculators allowed but please, no computer.


Required Course Materials

TextbookPricing and Revenue Optimization by Robert L. Phillips. Stanford Business Book, 2005. The syllabus includes specific references to various chapters in this book. 


Assessment Components

Individual Assignments:  There are six case assignments to be done individually. Submissions should be up to two pages in length and be submitted at the beginning of the session in which they are due. Keep a copy for your reference during class. Show all the work if your response requires a calculation.

Group Projects: Two data-driven projects to be done in groups of maximum four students.

Final Exam: An in-class, open book/notes test during our last meeting.

Class Attendance and ParticipationAttendance at each class is required.  If you cannot attend a particular class, please contact the instructors in advance in order to arrange for appropriate substitution. The development of speaking and listening skills is considered an important part of your evaluation in this course. Please use the following guidelines to determine your effectiveness in class participation


Group Projects

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole:   its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.

You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.






The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.


Professional Responsibilities For This Course




In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:




Classroom Norms


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


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