Yield (Revenue) Management classes..

Revenue Management / Yield management is a new area which has been perfected by the application of revenue management principles in the airline industry, pioneered by South west airlines of US. Only twenty years old, it was very difficult to see teaching material and learning material. It was then I first noticed that Sunil Chopra and Peter Meindl in their book on Supply Chain management have covered a chapter on revenue management. They discuss the different models, perishable inventory, overbookings and the bulk and spot offers model, and explain how multiple customer segments price differentiated on the dimension of time can lead to realising greater profits.

Click here for a presentation pdf..

Basically dealing with increasing the revenue from business operations, especially when dealing with perishable inventory like hotel rooms and airline seats , it is the fine application of stochastic probability and econometric analysis to arrive at optimum booking limits and capacity allocation.

While taking this topic for the first time in XIME, it was interesting. I was also the first to introduces this concept in Goa Inst of Management in 2005 and after that nobody has caught up with it afterwords. The students have been feeling really good about it and the fact that practical cases can be discussed in the class with really interesting situations cropping up, with the right dose of Mathematics and probability, is making me feel really happy about it.

Here is a work experience session I have taken in the class. The questions are given here.

Revenue Management problems for working experience ( the cases have fictitious data because of confidentiality agreements, but reflect a broadly correct picture for education purposes)

1. Qantas operates from Melbourne to Hongkong on a daily basis it's A320 aircraft with 200 seats on board at $500 for a business class ticket and $ 230 for an Economy class ticket. Find out the capacity to be kept aside for the luxury traveller if this demand is normally distributed with a mean of 85 and a variance of 40 ( ~N(85,40)). Find the total revenue from this cost pattern for the airlines for each fully booked non-stop flight.

If the CEO decides to reduce the luxury class cost to $450, ( app same demand distribution as the $500 demand),calculate the capacity for each segment and the total revenue for a fully booked flight.

The CEO decides to introduce a deluxe class at $ 800, demand for which ~N(35,20), what is the revised capacity of the three segments ( the total seats are reduced to 170 to facilitate better comfort for the deluxe class passenger) and the resulting total revenue for a fully booked flight.

2. The postponements ( one postponement possible per passenger ticket) for the daily Air Deccan flight from Bangalore to Kochi ( ATR , max capacity of 100) on any week day is found to be N(12,10). The cost to the company for flying a passenger is Rs 500 while it charges Rs. 800/- (besides the airport tax of Rs 1400). Any overbooked customer showing up is accommodated on Indigo Air at Rs 3500/= (incl. airport tax of Rs.1400). Find the no. of tickets which need to be overbooked to ensure maximum revenue for Air Deccan.

On weekends the cancellations reduce and is ~ N(8,9). Find the opt. no of over bookings to be done on weekends by Air Deccan.

3. Hotel Leela Palace Kempinski, Bangalore, the No 1 Hotel in the world has total 250 rooms. There are 10 luxury suites kept aside for VVIPs each costing Rs 20000 per night. The economy rooms are priced at Rs 5000 per night while the business class rooms are available at rs 9000 per night. Find the no of rooms to be set aside for the economy customer and the business customer if the demand for business class is ~N(40,25).

The economy rooms were going vacant on some of the days and hotel GM decides to introduce a super economy class of rooms at Rs 3000 per night for the holiday traveller to maximise revenue. If the demand for the economy class at Rs 5000/= is ~N(105,22), find the new capacity segregation for the different customer segments in the hotel.

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george..

Double standards of the Indian Left !!

http://timesofindia.indiatimes.com/Many_Colours_Of_Imperialism/articleshow/2500651.cms

If Beijing can align with US as far back as 1985 for nuclear co-operation why can't India ? Let us try to convince our dumb left ideologue ( no intellectual at all) Prakash Karat who has got confused with ideological and nationalistic positions. While Chinese would work for national interests, our Indian Communists and Marxists would prefer to project China and Russian interests than Indian..

Somebody needs to tell him that the Chinese nuclear proliferation in the 90s to Pakistan and the suppression of the Tibetans is more dangerous to India and world human rights than the US invasion of Afghanistan and Iraq ( India does not even remotely come in the picture).

India can exercise it's sovereignty by staying away from the nuclear deal but not by saying the dumb excuses that Prakash Karat and his team is barking all the while. We have some technological reasons to stay away from the US as we do not want our Thorium cycle nuclear energy cycle technology to be stolen by the US. Having the courage to say the right things at the right time and not be obfuscated by ideology and false pride requires great sense of feeling for a cause.

george.

Tehelka expose in Gujarat ..

The news channel Tehelka last week disguised as researchers out to study Hindu resurgence in Gujarat talked to some of the miscreants who were part of the massacre and rape of fellow citizens of their home state. It was very shocking to read the heroic revelations of some of those miscreants, sadly leaders of BJP, RSS,, who boasted of how they killed people freely at will and were able to walk scot free even now.

Thanks to the Gujarat govt, these people are not booked so far and still continue to be a threat to the minority community, whose marginalisation appears to be almost complete in Gujarat, unless the central govt, Supreme court and the National Human Rights Commission interferes and gives model punishment to all the people who were involved in the murder and rape of fellow Indians.

It is a pity we call them Indians coming from the land of the father of our nation, Mahatma Gandhi. If there can be any group of people who are as anti-national and working to disintegrate our country, they are for sure these goons !!

Even the majority community are not fools who can be treated so for a long time, there are some sensible people in them too and they, I hope, will see to it that this state of lawlessness and anarchy does not continue in Gujarat from now on. Wait till the elections are over !!

Gujjus can be sensible if the occasion demands.

george..

Daandiya Raas in XIME..

Saturday 27 Oct it was Daandiya Raas in XIME. Started at 7 PM and went upto 11 PM. It was attended by almost two hundred students ( both boys and girls) in the foyer of the Men's hostel. Started with Daandiya Raas and after dinner, the programme switched over to western style dancing, but was very neat and good. The shortage of an experienced DJ was felt, though.

The good thing about the programme was the excellent ice breaking which happened between the new faculty (including me and Prof George Kuryan) and the students. Some of them are terrific dancers and were dancing for al of 4 hrs, the energy and stamina..!

Hope more such events happen in XIME. Besides providing good entertainment to the student community, these are also excellent stress busters for the students.

george

Still added responsibilities at XIME ..

The President and Director along with the Secretary XIME society had asked me to take charge as the Associate Dean (Academic Programme) at XIME from 22 Oct 2007, Monday.

I have taken over charge today Monday, 22 October, 2007 and hope to do the job with greatest sincerity and devotion to the best of my ability.

With help from all the staff and students of the Institution, I am sure we can together help the Institution reach great heights and excel in all spheres.

Once again requesting help and cooperation from the stakeholders in the process.

I remain, sincerely yours,

george..

Taking new responsibilities at XIME.

New responsibilities have always challenged me as it demands more from oneself to the organization. Not forgetting the fact that new responsibilities are what gets one going to cover higher academic responsibilities and duties to the student community and society in general.

I was taken totally aback when the news was conveyed to me by the President Prof J Philip of Xavier Inst. of Management and Entrepreneurship (XIME)that I have to take over the added responsibility of Coordinator of new Admissions for the year 2008 to XIME. XIME admits students through the XAT ( Xavier Admissions Test administered by Xavier Labour Relations Institute).

It is indeed a challenge as I look forward to interacting with a number of Institutions and individuals and conducting interviews and group discussions to select the final batch of one hundred and twenty students who will enter XIME during 2008.

I am sure I will be able to fulfil the duties and responsibilities to the fullest satisfaction of the XIME Society and its office bearers. I pray to God to give me the courage of character and conviction to take added responsibilities in future to make this life worthwhile on this earth.

Full details regarding admissions and the time schedule of Interviews are available at www.xime.org .

George Easaw

Interacting with Ms Sonali Kulkarni, great grand daughter of Mahatma..

I was surprised to come across a chief guest, simple and attractively dressed who came to the Maria Philip Inter B-school debating competition in Xavier Institute of Management and Entrepreneurship, (XIME), Electronic City, Bangalore on Saturday, 13 Oct, 2007. The competition was lively on the topic, Can India's economic growth be sustained ?? Neatly organised and competed.

a humble and simple
personality ..

The Chief Guest Ms Sonali was the CEO of Fanuc India, the Japanese MNC manufacturing Robot control systems. She gave a good talk on how ethical practices, though not appreciated in the short run, can turn out to be useful in the long run, how it helps the company to have ethics and values in place for the employees to follow.

During the tea break after the talk, I interacted with Ms Sonali. Being the great grand daughter of the father of our nation, I thought it a good opportunity to talk with her. Being a humble fan of that towering personality, this was an opportunity for me to know her.

A very simple and soft spoken lady, she was delighted to know that her 'not too great' talk had the real punch needed to send the message through to the student community, that values and ethics are valued even to this day in the corporate world and they are not old-fashioned at all. Grow steadily and in small sure, positive steps.

They help the company establish its name for fair and ethical practices and benefit in the long run. A good example is the case of Tata Sons, known for their exemplary, fair dealings and business values, the world over, a tradition set by Sir Jamshedji Tata almost a hundred and fifty years back and carried over by worthy individuals from that family..

When I told Ms Sonali that I was not surprised to hear this from her at all, it was there in her blood, from the rich and noble lineage she inherited, she was not prepared to take it and said anybody would do it that way, no need to be born into a particular family to acquire such traits. She was impressed by the Institute, the academic community, students and above all the green and well kept gardens and surroundings.

With a pleasing face and lot of fond memories, she left the college in her Toyota Corolla, promising students of Systems and Operations more opportunities in the future to visit her factory and learn about it. A truly worthy great-grand-daughter of a towering personality..

George Easaw.

Diff between what they teach at Engg and business schools..

Often new entrants to an engineering and business school do not know how the teaching at the two institutes are different from each other and what they teach you at these institutions. This small note, I am sure, will help the student to realise the subtle differences between the two and help the student to plan his future well and lead a happy fulfilling life.

In an Engg school, one learns to use quantitative tools, looking at everything in terms of numbers, weights and measurements. In other words, quantitatively. Analysing situations by the use of numbers, drawing and capturing imagination and understanding of a topic, transferring your understanding of a part to somebody else through graphics / engg drawing are all valuable skills an engineer need to learn in life. Whenever you see anything you tend to look at it in a systems way. What it does, how it works, what are the different components, what powers the system , how it moves, how it is audible, what is it's capacity and so on.

In a business school you are trained differently - to foster an entrepreneurial spirit. When you see a part or a process, you tend to look at it with a commercial eye. How cost effectively can one manufacture it, how well can one run it Naturally such entrepreneurial thoughts are vital for the growth of the country and the economy too. The thoughts like how productive it is, whether the operation can be done any better, is it possible to reduce the manpower, can it be done at other places too come to our mind. How can the part be manufactured with other material available locally, how can the costs be reduced, what particular feature of the part makes it unique over it's competitors are important from the product life cycle view point.

A successful engineer and manager will have mastered the art of looking at any product both from the quantitative ( ie. analytical) and commercial view points. Because finally it matters how cost effective and how technically superior your item or product needs to be, to finally survive in the market. The market finally decides whether the product will survive or not and compete with other comparable products, whether customers will buy, whether the demand will sustain or not.

Any engineering or management student should try to understand this subtle difference and try to moderate his/her learning process accordingly. You can rest assured that you will become a very successful practical person, whether you are an engineer or a manager.

George

Towards a more tolerant exploration of space frontiers..

There is an urgent need to sensitise the world countries of the need for some moderating force in space exploration and the conquests of it's infinite frontiers. It is good that after thirty five years there is renewed interest in space exploration among the space faring nations. The words of Konstantin Tsilkovsky cannot be more relevant than now. What we see today is rampant commercialisation and militarisation of space, especially the Star wars initiative during the Reagan years. The spy satellites orbiting the earth is proof enough of this subversive intention of a section of mankind.

Let us not forget that space is the joint property of mankind. The countries which have the technical ability to build and launch satellites are using it for their personal benefits (including India), while we see Africa, the cradle of human civilization craving for growth and development, with some sections in depraving poverty. The Space Lab initiative was a welcome philanthropic move but there is less interest in such joint ventures now.

Like we have polluted and monopolised earth for our selfish ends, let us not likewise monopolise space and the unknown frontiers beyond. Let our children also get an opportunity to gaze at the stars and the unknown universe and be amazed by it's vastness and precision. Let us not pollute it by launching a myriad of satellites, blinking, posing a constant threat of space debris. Considering it's vastness this is only a remote possibility, but nonetheless cannot be dismissed altogether.

If mankind is to establish a foothold in alien and inhospitable environments, co-operation among the countries of the world is vital. A joint space exploration committee which can oversee individual explorations and at the same time leverage it for the development of mankind is the need of the hour. Hope the countries of the world will look beyond the immediate commercial benefits of space exploration and strive for leveraging it for the whole of mankind.

george..

Metro Cash and Carry - Supply Chainers Delight

Yesterday I happened to visit the Metro cash and carry hyper mall in Yeshwantpur. I haven't seen such a store in my life and such varied merchandise under one roof.

Right from office stationery, to house hold items, electronics items, TVs, Computers to drinks, meat, fish and poultry items, clothes, toiletry, footwear, snacks what not.. Because of objection from the retailers and APMC (Agricultural produce marketing co-operative) only processed food items are being sold here, not produce fresh from the fields. One cannot find rice, wheat, vegetables, fruits, cereals, pulses here.

Since it is meant only for businesses and not for direct selling to customers, the entry to this shop is only through metro cards which are issued to industries and other enterprises which are run by individuals. Salaried people will find for the time being shopping t Metro difficult, unless they have a relative or friend with a metro card.

One has to buy for a minimum amount of Rupee one thousand and most of the items are sold in packs of two up to a dozen. For instance one can buy Reebok shoes available outside at Rs. two thousand here at rupees one thousand, but there should a minimum quantity of three pairs of footwear items.

By any rough estimate there is inventory here worth upward of rupees two hundred crores. Effective and efficient procurement systems, effective tracking of inventory, efficient Information systems to keep track of sales, arrivals and damages etc is of vital need for the successful functioning of the hyper mall. Minimization of procurement lead times, implementing delayed product differentiation strategies, minimizing inventory levels under stochastic demand, minimizing total costs of operations are all major issues which need to be handled by the Metro personnel on a war footing in order to be cost competitive and to remain the market leader.

With huge parking area and a processing/packing area behind, the Metro is sure to stay in the country. Now with other retailers establishing themselves in the market, it is only a matter of time before Indian customers realise the importance of efficient purchasing and processing policies which will ensure availability of cheap and high quality items to the Indian public.

If ensuring availability of high quality items at affordable rates to the public with ease and convenience of shopping can be achieved by Metro, it is beneficial for the country as a whole. India needs to encourage such initiatives to meet the needs of rapid urbanization which is happening in the country. The question of loss of livelihood for the existing retailers and traders is only momentary as they will get alternate employment and employ their entrepreneurial spirits to come up with novel storage, distribution and purchase plans for the big businesses, creating a synergy and a win win situation for all the stake holders in the process.

George Easaw.

From Goa to Bengalooru (via Peerumedu ..)

The journey from Goa to Bangalore via Peerumedu has been quite interesting.

While applying for a two year leave from Goa Engg college, I only had thoughts of going back to serve my home state and the student community there. To give back to the state and community my resources, efforts and time. If everything were to go right, also had plans to forgo the remaining seventeen years of service in Goa govt and settle down in Kerala. Armed with a PhD from IIT Bombay, it was possible.

It was exciting initially.

Later on I came to find that teaching only UG students is a different piece of cake altogether. Not that I do not want to, but doing it in Peermade for one year was good enough. Serious learning and research does not happen. Particularly with the UG syllabus of MG University, it was no challenge at all !! Was getting worried whether I was wasting the efforts. Continuing with learning, teaching and research and contributing professionally, now it never mattered where I am, was at the back of the mind always.

It was then that the advertisement for faculty openings came in The Hindu in Xavier Institute of Management and Entre'ship, Bangalore. I grabbed the opportunity and did not look back. Being able to teach top students in a professional, world-class environment is something great and I have been yearning for that for a long time. I had full support from my wife in my pursuit of these academic dreams. Were it not for her unstinted support to help me realise my dreams ( shamelessly I must admit, I have been selfish ..), I would never have made it at all.

Thank you everybody, my parents, teachers and professors, I submit myself at your LOTUS feet unconditionally.

To all my friends, it's been great to have you by my side and wish you to be with me in all my strides in future too.

Thanks once again..

george..

Leaving MBC, painful ..

Leaving MBC finally on 29 Sept 07 was painful. On 28 Sept, the mech engg students gave a fantastic farewell. The students are really loving. The principal Dr Paul Mathew also came, Dr George Eapen te bursar was a little late. After giving mementos and so on, it was speeches. Eventhough I have taken a selfish move to go out to a b-school in Karnataka, the move is going to help the student community as a whole, not only the students of MBC College. Even if they are interested in coming over to Bangalore to do a PG in business administration, they are welcome to apply to Xavier and I can help them and counsel whichever way I can.

Finally India is so actively going ahead. Change is vital in the society and we need to adapt to change as fast as possible so that we equip ourselves with the necessary industry skills. As a very practical man I believe that it is industry exposure which enables us to give our best to the students.

On Saturday at 3 PM the mech engg staff also gave me a warm send off. It was very heart touching. On Saturday also got Fr Tiju to do the house prayers, koodasha at home. On Sunday left Peermade at 11 am and reached Kanjirapally where seemon joined me and we reached ekm at 4 pm. In between did some shopping too. Thomaskutty dropped me At the airport at 6.30 and flight Indigo, Airbus A 320 took off at 7.30 PM. It reached Bangalore at 8.30 pm and reached the campus at 9.30 pm. Went off to sleep. Morning reported at the insti at 9 am and met Prof Philip. The timings here are from 9 am to 5 pm with a half an hour gap in between for lunch.

Everything is going good and cool here and hope this stint is going to be very beneficial to myself and the institute.

Thank you MBC and welcome XIME.

George..