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Yield management occurs when a firm adjusts the price of its product or service in order to influence demand. Usually, it is done to make future demand more predictable, which can be important to successful sales and operations planning. This practice is commonly used in the airline, hotel, casino, and auto rental industries, for example. Policies that involve overbooking, requiring deposits, and no-show or cancellation penalties are coordinated with the differential pricing scheme.
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