Research Journal articles Product Quality Selection: Karaesman, Garrett van Ryzin Mark-down pricing:
Get Full Essay Get access to this section to get all help you need with your essay and educational issues. What challenges does TNG face in managing its leases on trailers?
How might TNG implement revenue management? What ideas or approaches seem most viable in a business like this? Based on the data for the Yakima branch, what is the potential revenue opportunity at this location from optimally controlling the availability of leases of various durations?
The spread sheet with the data Transportation national group columbia business school essay Exhibit 5 has been posted. Note there is a small, inconsequential discrepancy between the spreadsheet and the exhibit in the case — just use the data in the spreadsheet.
If TNG wanted to implement revenue management, what recommendations would you make going forward and how would you prioritize your recommendations? The highly seasonal nature of demand at many locations makes it difficult for the company to manage the leasing.
The lease rates of the market also vary over time due to the differential season. Owing to the competition of local markets and differential demand, the company may, therefore, have little control over the local spot rates. Consequently, the profit may not be as high as the company may want since the price is mostly controlled by the local market.
In addition, the company has to compete not only with the Excel, but also the local businesses. It is important that the company consider the ability to accept the potential contracts in the future.
Regarding the geographical demand, one-way leases are also difficult to manage, because they involved one branch losing a piece of equipment and another branch gaining it. Whether this net change is desirable or not depend on the local market conditions at each location. Thus, coordination among the regional management and reallocation of equipment is important since there could be long-term imbalances in equipment that arose due to major one-way seasonal flows.
However, there are some faults how to use the ROI. The purpose of using ROI is to know the company can collect more than the cost of investment or not and for planning of future investment. This number should be changed by the total number of years that trucks are going to use and new truck investment plan decided by the demand.
Therefore, the critical point that the front person uses should be varied in each year. Second, ROI should be used for annually basis instead of a single contract in this highly competitive market.
Providing lower price may result in increasing prospective customers, increasing the utilization of trucks and finally rising the total ROI, analogous to globally optimum. In the competitive market, flexible bottom line of price is necessary to keep prospective important customers.
They can update the ROI everyday but they should use the yearly data. Furthermore, there are many ways to calculate and in this case, it is better to use the gross profit instead of the revenue. It allows them to assess the ability to collect money more accurately although the operating cost is relatively small compared with the capital investment.
Third, utilization rate of trucks should also be emphasized and in some cases they should prioritize the utilization rather than the ROI. Also high utilization may result in having more prospective customers in the future.
It depends on the revenue management and utilization and ROI should be considered simultaneously. TNG does not concentrate on the gross profit for the year Exhibit 4 because it has already invested on the existing trailers.
It could consider an opportunity of having a larger number of fleet trailers. Therefore, the focus is to maximize profit since it might waste the capital investment if the trailers are just to park, especially since the operating costs of serving the fleet are relatively small compared to the capital cost of equipment.
Given that TNG has a fixed number of trailers capacity that have very high capital costs, it should try to implement revenue management into its operational design so as to maximize revenue and minimize revenue loss or opportunity costs since operating costs to service the fleet are relatively small.
It can do this by providing better service for certain customers and thus change a higher price price differentiation and also control the number of trailers leased at lower prices balancing the tradeoff between current and future revenue. For example, it is charging higher prices during the peak periods and also for contracts that are shorter in duration.
In addition, given that one-way service give rise to logistics problems, TNG charges a higher price for the one-way service. However, more can be done in maximizing its revenue.
Another way would be for TNG to segment its customers into a few categories. For examples, customers whose strategies are geared towards service, customers who are price-sensitive, customers who are able to commit a certain capacity ahead of time and customers who need the trailers at very short notice due to insufficient equipments or out-of-service equipments.
For customers who are geared towards service, time-sensitive or require trailers at very short notice, their willingness to pay is usually higher, especially if the vendor is able to meet their stringent requirements or exceed it. Therefore, it is possible for TNG to charge them a higher price by provide them with a higher level-of-service through more frequent service, higher probability of service, priority assignment of trailers, on-time guarantee, additional value-added services bundlingetc.
By marketing its competitive advantage of a large network and superior service, it would be able to differentiate itself from the rest of the competitions in the eyes of these service-oriented customers. The same would apply if TNG were to provide discount to companies that are able to commit to a certain volume of leasing per year especially specifying the volume for non-peak period.
The following are a few types of pricing strategy TNG could use.Analyzing the Columbia Business School Essays. Paul. May 15, Additionally, why is Columbia Business School a good fit for you? (Maximum of words). For Essay #1, this is basically the same as last year.
Just because you bumped out your thesis to the short answer field doesn't mean you are off the hook in defining .
Rather than answer the first essay question above, current Knight-Bagehot Fellows applying to Columbia Business School should use the space allocated to the first essay to complete the Wiegers Fellowship application essay.
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Transportation National Group (Columbia Business School) Preparation questions for Transportation National Group 1. What challenges does TNG face in managing its leases.