Decision Support System for Customer Value-based Revenue Management in Manufacturing

In manufacturing, providers are interested both in a revenue maximizing allocation of their limited production capacity (as goal of revenue management) and the establishment of long-term business relations with their clients (as goal of customer relationship management). Due to long-term contracts and strategic reference customers, users of traditional revenue management systems already account for varying worthiness of clients, and intuitively ignore or override booking control suggestions in order not to endanger customer relations. So in a holistic approach, the integration of both management concepts, each of decisive competitive impact, is suggested. However, a solid scientific foundation of this desirable decision support and an implemented (prototype) IT-system, that provides the revenue analyst with greater insights, higher accuracy, quality and trust in decision process, are still missing for manufacturing industry. Based on a literature review, we believe this paper is the first to define, formalize and analyze the decision-making problem associated with these partly diametric objectives. In particular, the paper introduces a decision support system for a manufacturing provider with limited capacity, supplying analysts with formatted and summarized data to make transparent and comprehensible control decisions, and suggesting specific booking control actions based on simulation results and integrated usage of provided data.