Cost and Revenue Management (MHR108)
This course provides students with knowledge and tools to understand the relationships between production cost, market demand and revenue management. These are the key determinants to business profit and thus the sustainable development of any business. Modern leaders are expected to understand a business process designed to optimize the financial performance of the operation through all market conditions. They are expected to anticipate and react to market demand to maximise the businesses’ revenues while controlling costs.
Course description for study year 2024-2025. Please note that changes may occur.
Course code
MHR108
Version
1
Credits (ECTS)
10
Semester tution start
Spring
Number of semesters
1
Exam semester
Spring
Language of instruction
English
Content
The course has the following primary learning objectives:
- To understand the key cost elements in a standard financial statement of any business.
- To stimulate demand from different customers and thus to gain the maximum revenue in the service sector where supply capacity is often fixed and perishable. The essence of this discipline is to understand the customers’ value perceptions and to align the right products to each customer segment accurately.
- To review the economic principles of pricing and understand the importance of price differentiation for different market segments and dynamic pricing following time-varying demand in the service sector.
- To understand how different pricing and revenue strategies may affect revenue and cost simultaneously and thus how to balance revenue and cost to optimize profit.
Learning outcome
After completing the course, the students should have the following complete learningsoutcome defined in knowledge, skills, and general competence:
Knowledge
- Understand the key indicators to measure the economic performance of a business
- Understand the key cost elements in a business
- Understand the market complexity and perishable and constrained inventory in the service sector.
- Understand the various customer needs and willingness to pay in different market segments.
- Understand the main pricing theories and strategies including price discrimination, dynamic pricing, and package price.
- Understand how different product development and price strategies may affect total revenue.
- Understand how different market and revenue strategies may affect costs and how to balance revenue and cost.
Skills
- Can read and understand a standard financial statement
- Can have basic business analytical skills
- Can exchange views and experiences with others in the field of revenue management and cost control.
- Can contribute to the development of good practices in revenue management.
General competence
- Are capable to present their findings and business insights to diverse audience.
- Can write a business analysis report in the field of cost and revenue management.
Required prerequisite knowledge
Recommended prerequisites
Exam
Two term papers
| Form of assessment | Weight | Duration | Marks | Aid |
|---|---|---|---|---|
| Term paper 1 | 1/2 | Letter grades | ||
| Term paper 2 | 1/2 | Letter grades |
Term paper 1 is a group exam. Term paper 2 can be written individually or in a group.