Question

what exactly is yield management, and what does it have to do with aggregate planning?

Answer 1

Yield management is related to setting different prices for a service as per the customers willingness and ability to pay for that particular service to increase the profit margin of a company.

It has high fixed cost while the variable costs are comparately low to meet the demand fluctuation.

Example : In a cruise ship, cabin prices are set according to the services provided in the cabin, like for sea facing cabin price would be high as compared to other cabin types.

Aggregate planning is related to yield management as it helps in planning the demand of labors for the services provided that is human resource requirements which helps the smooth functioning of the company as well as finding optimal number of employees.