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The Bush administration generally pursued free trade policies. China entered the World Trade Organization (WTO) in late 2001. Bush used the authority he gained from the Trade Act of 2002 to push through bilateral trade agreements with several countries. Bush also sought to expand multilateral trade agreements through the WTO, but negotiations were stalled in the Doha Development Round for most of Bush's presidency. |
The sizable decline in U.S. manufacturing jobs since 2000 has been blamed on various causes, such as trade with a rising Asia, offshoring of jobs with few restrictions to lower wage countries, innovation in global supply chains (e.g., containerization), and other technology improvements. The millions of construction jobs created during the housing bubble that peaked in 2006 helped mask some of this adverse employment impact initially. Further, households dramatically increased their debt burden from 2001-2007, extracting home equity for use in consumption. However, the housing bubble collapse in 2006-2008 contributed to the subprime mortgage crisis and resulting Great Recession, which resulted in households switching from adding debt to paying it down, a headwind to the economy for several years thereafter. |
Developing countries blamed the US and the EU for stagnated negotiations since both maintain protectionist policies in agriculture. While generally favoring free trade, Bush has also occasionally supported protectionist measures, notably the 2002 United States steel tariff early in his term. Bush also implemented a 300% tax on Roquefort cheese from France in retaliation for a European Union ban on hormone-treated beef common in the American beef industry. |
George W. Bush successfully gained ratification of the Dominican Republic–Central America Free Trade Agreement (DR-CAFTA). Supporters of DR-CAFTA claim it has been a success, but detractors still oppose the agreement for a variety of reasons including its impact on the environment. |
In 2005, Ben Bernanke addressed the implications of the USA's high and rising current account (trade) deficit, resulting from USA imports exceeding its exports. Between 1996 and 2006, the USA current account deficit increased to a record of nearly 6% of GDP. Financing the trade deficit required the USA to borrow large sums from abroad, much of it from countries running trade surpluses, mainly the emerging economies in Asia and oil-exporting nations. A significant portion of this borrowing was directed by large financial institutions into mortgage-backed securities and their derivatives, a factor that contributed to the housing bubble and the crises that followed. The trade deficit peaked in 2006 along with housing prices. |
President Bush advocated the partial privatization of Social Security in 2005-2006, but was unsuccessful in achieving any reforms to the program against strong congressional resistance. His proposal would have diverted some of the payroll tax revenues that fund the program into private accounts. Critics argued that privatizing Social Security does nothing to address the long-term funding challenge facing the program. Diverting funds to private accounts would reduce available funds to pay current retirees, requiring significant borrowing. An analysis by the Center on Budget and Policy Priorities estimates that President Bush's 2005 privatization proposal would have added $1 trillion in new federal debt in its first decade of implementation and $3.5 trillion in the decade thereafter. |
According to the 2016 Social Security Administration Trustees Report, payments will be cut by 23% under current law around 2035, if no reforms are made to the program. |
President Bush advocated the Ownership society, premised on the concepts of individual accountability, smaller government, and the owning of property. Critics have argued this contributed to the subprime mortgage crisis, by encouraging home ownership for those unable to afford them and insufficient regulation of financial institutions. The number of economic regulation governmental workers was increased by 91,196, whereas Bill Clinton had cut down the number by 969. |
President Bush signed the Sarbanes-Oxley Act into law during July 2002, which he called "the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt." The law was passed in the wake of several corporate scandals and widespread stock market losses. The law addressed conflicts of interest between accounting firms and the corporations they audit and required executives to certify the accuracy of the corporation's financial statements. The law has been controversial, with some advocating its positive effect on investor confidence and detractors citing its significant cost. |
In 2003, the Bush Administration attempted to create an agency to oversee Fannie Mae and Freddie Mac. The bill never made progress in Congress, facing sharp opposition by Democrats. In 2005, the Republican controlled House of Representatives passed a GSE reform bill (Federal Housing Finance Reform Act) which "would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership". However, the Bush administration opposed the bill and it died in the Senate. Of the bill and its reception by the Bush White House, Ohio Republican Mike Oxley (the bill's author) said: "The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis. All the handwringing and bedwetting is going on without remembering how the House stepped up on this. What did we get from the White House? We got a one-finger salute." The Bush economic policy regarding Fannie Mae and Freddie Mac changed during the economic downturn of 2008, culminating in the federal takeover of the two largest lenders in the mortgage market. Further economic challenges have resulted in the Bush administration attempting an economic intervention, through a requested $700 billion bailout package for Wall Street investment houses. |
President Bush and his economic experts did not adequately address fundamental changes in the banking sector which had taken place over the two decades prior to the crisis. The essentially unregulated shadow banking system (e.g., investment banks, mortgage companies, money market mutual funds, etc.) had grown to rival the traditional, regulated depository banking system but without equivalent safeguards. Nobel laureate Paul Krugman described the run on the shadow banking system as the "core of what happened" to cause the crisis. "As the shadow banking system expanded to rival or even surpass conventional banking in importance, politicians and government officials should have realized that they were re-creating the kind of financial vulnerability that made the Great Depression possible—and they should have responded by extending regulations and the financial safety net to cover these new institutions. Influential figures should have proclaimed a simple rule: anything that does what a bank does, anything that has to be rescued in crises the way banks are, should be regulated like a bank." He referred to this lack of controls as "malign neglect." |
President Bush stated in September 2008: "Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st century global economy remains regulated largely by outdated 20th century laws." The Securities and Exchange Commission (SEC) and Alan Greenspan conceded failure in allowing the self-regulation of investment banks, which proceeded to take on increasingly risky bets and leverage after a key 2004 decision. |
The last year of Bush's second term was dominated by the Great Recession. GDP declined in the 1st, 3rd, and 4th quarters of 2008 by -2.7%, -1.9% and -8.2%, respectively. The recession officially lasted from December 2007 to June 2009, with the economy returning to consistent growth in Q3 2009, although civilian employment did not return to its December 2007 peak until September 2014. |
Fed chair Ben Bernanke explained in 2010 that vulnerabilities in the global financial system built up over a long period of time, and then specific triggering events set the 2007-2008 subprime mortgage crisis into motion. For example, vulnerabilities included failure to regulate the risk-taking of the non-depository banking sector, the so-called shadow banks such as investment banks and mortgage companies. These companies had outgrown the regulated depository banking sector, but did not have the same safeguards. Further, financial connections were established between the depository banks and shadow banks (e.g., via securitization and special purpose entities) that created dependencies that were not well understood by regulators. Certain types of derivatives, essentially bets on the performance of other securities, remained largely unregulated and were another opaque source of dependencies. |
Bernanke further explained that specific triggering events began in mid-2007, as investors began to withdraw funds from the shadow banking system, analogous to depositors withdrawing money from depository banks in past bank runs. Investors became unsure of the value of the securities (loan collateral) held by the shadow banks, as many derived their value from subprime mortgages. Mortgage companies could no longer borrow money to originate mortgages, and many failed in 2007. The crisis accelerated in 2008, as the largest five U.S. investment banks, which had $4 trillion in liabilities by the end of 2007, could no longer obtain financing. They had grown increasingly dependent on short-term sources of financing (e.g., repurchase agreements), and were unable to obtain new funding from investors. These investment banks were forced to sell long-term securities at fire-sale prices to meet their daily financing needs, suffering enormous losses. Concerns about the possible failure of these banks led the financial system to essentially freeze by September 2008. The Federal Reserve increasingly intervened in its role as lender of last resort to stabilize the financial system as the crisis deepened. |
Bush responded to the early signs of economic problems with lump-sum tax rebates and other stimulative measures in the Economic Stimulus Act of 2008. In March 2008, Bear Stearns, a major US investment bank heavily invested in subprime mortgage derivatives, began to go under. Rumors of low cash reserves dragged Bear's stock price down while lenders to Bear began to withdraw their cash. The Federal Reserve funneled an emergency loan to Bear through JP Morgan Chase. (As an investment bank, Bear could not borrow from the Fed but JP Morgan Chase, a commercial bank, could). |
The Fed ended up brokering an agreement for the sale of Bear to JP Morgan Chase that took place at the end of March. In July, IndyMac went under and had to be placed in conservatorship. In the middle of the summer it seemed like recession might be avoided even though high gas prices threatened consumers and credit problems threatened investment markets, but the economy entered crisis in the fall. Fannie Mae and Freddie Mac were also put under conservatorship in early September. |
A few days later, Lehman Brothers began to falter. Treasury Secretary Hank Paulson, who in July had publicly expressed concern that continuous bailouts would lead to moral hazard, decided to let Lehman fail. The fallout from Lehman's failure snowballed into market-wide panic. AIG, an insurance company, had sold credit default swaps insuring against Lehman's failure under the assumption that such a failure was extremely unlikely. |
Without enough cash to pay out its Lehman-related debts, AIG went under and was nationalized. Credit markets locked up and catastrophe seemed all too likely. Paulson proposed providing liquidity to financial markets by having the government buy up debt related to bad mortgages with a $700 billion Troubled Asset Relief Program. Congressional Democrats advocated an alternative policy of investing in financial companies directly. Congress passed the Emergency Economic Stabilization Act of 2008, which authorized both policies. |
Throughout the crisis, Bush seemed to defer to Paulson and Federal Reserve Chairman Ben Bernanke. He kept a low public profile on the issue with his most significant role being a public television address where he announced that a bailout was necessary otherwise the United States "could experience a long and painful recession." |
Nearly all of the money paid out for banking bailouts by the Bush administration was in the form of loans that were paid back. For example, as of 2012 the TARP program had paid out $245 billion to banks, while the government got back $267 billion including interest. |
= = = Revenue management = = = |
Revenue management is the application of disciplined analytics that predict consumer behaviour at the micro-market levels and optimize product availability and price to maximize revenue growth. The primary aim of revenue management is selling the right product to the right customer at the right time for the right price and with the right pack. The essence of this discipline is in understanding customers' perception of product value and accurately aligning product prices, placement and availability with each customer segment. |
Businesses face important decisions regarding what to sell, when to sell, to whom to sell, and for how much. Revenue management uses data-driven tactics and strategy to answer these questions in order to increase revenue. The discipline of revenue management combines data mining and operations research with strategy, understanding of customer behavior, and partnering with the sales force. Today, the revenue management practitioner must be analytical and detail oriented, yet capable of thinking strategically and managing the relationship with sales. |
Before the emergence of revenue management, BOAC (now British Airways) experimented with differentiated fare products by offering capacity controlled "Earlybird" discounts to stimulate demand for seats that would otherwise fly empty. Taking it a step further, Robert Crandall, former Chairman and CEO of American Airlines, pioneered a practice he called yield management, which focused primarily on maximizing revenue through analytics-based inventory control. Under Crandall's leadership, American continued to invest in yield management's forecasting, inventory control and overbooking capabilities. By the early 1980s, the combination of a mild recession and new competition spawned by airline deregulation act (1978) posed an additional threat. Low-cost, low-fare airlines like People Express were growing rapidly because of their ability to charge even less than American's Super Saver fares. After investing millions in the next generation capability which they would call DINAMO (Dynamic Inventory Optimization and Maintenance Optimizer), American announced Ultimate Super Saver Fares in 1985 that were priced lower than those of People Express. These fares were non-refundable in addition to being advance-purchase restricted and capacity controlled. This yield management system targeted those discounts to only those situations where they had a surplus of empty seats. The system and analysts engaged in continual re-evaluation of the placement of the discounts to maximize their use. Over the next year, American's revenue increased 14.5% and its profits were up 47.8%. |
Other industries took note of American's success and implemented similar systems. Robert Crandall discussed his success with yield management with J. W. "Bill" Marriott, Jr., CEO of Marriott International. Marriott International had many of the same issues that airlines did: perishable inventory, customers booking in advance, lower cost competition and wide swings with regard to balancing supply and demand. Since "yield" was an airline term and did not necessarily pertain to hotels, Marriott International and others began calling the practice Revenue Management. The company created a Revenue Management organization and invested in automated Revenue Management systems that would provide daily forecasts of demand and make inventory recommendations for each of its 160,000 rooms at its Marriott, Courtyard Marriott and Residence Inn brands. They also created "fenced rate" logic similar to airlines, which would allow them to offer targeted discounts to price sensitive market segments based on demand. To address the additional complexity created by variable lengths-of-stay, Marriott's Demand Forecast System (DFS) was built to forecast guest booking patterns and optimize room availability by price and length of stay. By the mid-1990s, Marriott's successful execution of revenue management was adding between $150 million and $200 million in annual revenue. |
A natural extension of hotel revenue management was to rental car firms, which experienced similar issues of discount availability and duration control. In 1994, revenue management saved National Car Rental from bankruptcy. Their revival from near collapse to making profits served as an indicator of revenue management's potential. |
Up to this point, revenue management had focused on driving revenue from Business to Consumer (B2C) relationships. In the early 1990s UPS developed revenue management further by revitalizing their Business to Business (B2B) pricing strategy. Faced with the need for volume growth in a competitive market, UPS began building a pricing organization that focused on discounting. Prices began to erode rapidly, however, as they began offering greater discounts to win business. The executive team at UPS prioritized specific targeting of their discounts but could not strictly follow the example set by airlines and hotels. Rather than optimizing the revenue for a discrete event such as the purchase of an airline seat or a hotel room, UPS was negotiating annual rates for large-volume customers using a multitude of services over the course of a year. To alleviate the discounting issue, they formulated the problem as a customized bid-response model, which used historical data to predict the probability of winning at different price points. They called the system Target Pricing. With this system, they were able to forecast the outcomes of any contractual bid at various net prices and identify where they could command a price premium over competitors and where deeper discounts were required to land deals. In the first year of this revenue management system, UPS reported increased profits of over $100 million. |
The concept of maximizing revenue on negotiated deals found its way back to the hospitality industry. Marriott's original application of revenue management was limited to individual bookings, not groups or other negotiated deals. In 2007, Marriott introduced a "Group Price Optimizer" that used a competitive bid-response model to predict the probability of winning at any price point, thus providing accurate price guidance to the sales force. The initial system generated an incremental $46 million in profit. This led to an Honorable Mention for the Franz Edelman Award for Achievement in Operations Research and the Management Sciences in 2009. |
By the early 1990s revenue management also began to influence television ad sales. Companies like Canadian Broadcast Corporation, ABC, and NBC developed systems that automated the placement of ads in proposals based on total forecasted demand and forecasted ratings by program. Today, many television networks around the globe have revenue management systems. |
Revenue management to this point had been utilized in the pricing of perishable products. In the 1990s, however, the Ford Motor Company began adopting revenue management to maximize profitability of its vehicles by segmenting customers into micro-markets and creating a differentiated and targeted price structure. Pricing for vehicles and options packages had been set based upon annual volume estimates and profitability projections. The company found that certain products were overpriced and some were underpriced. Understanding the range of customer preferences across a product line and geographical market, Ford leadership created a Revenue management organization to measure the price-responsiveness of different customer segments for each incentive type and to develop an approach that would target the optimal incentive by product and region. By the end of the decade, Ford estimated that roughly $3 billion in additional profits came from revenue management initiatives. |
The public success of Pricing and Revenue Management at Ford solidified the ability of the discipline to address the revenue generation issues of virtually any company. Many auto manufacturers have adopted the practice for both vehicle sales and the sale of parts. Retailers have leveraged the concepts pioneered at Ford to create more dynamic, targeted pricing in the form of discounts and promotions to more accurately match supply with demand. Promotions planning and optimization assisted retailers with the timing and prediction of the incremental lift of a promotion for targeted products and customer sets. Companies have rapidly adopted price markdown optimization to maximize revenue from end-of-season or end-of-life items. Furthermore, strategies driving promotion roll-offs and discount expirations have allowed companies to increase revenue from newly acquired customers. |
By 2000, virtually all major airlines, hotel firms, cruise lines and rental car firms had implemented revenue management systems to predict customer demand and optimize available price. These revenue management systems had limited "optimize" to imply managing the availability of pre-defined prices in pre-established price categories. The objective function was to select the best blends of predicted demand given existing prices. The sophisticated technology and optimization algorithms had been focused on selling the right amount of inventory at a given price, not on the price itself. Realizing that controlling inventory was no longer sufficient, InterContinental Hotels Group (IHG) launched an initiative to better understand the price sensitivity of customer demand. IHG determined that calculating price elasticity at very granular levels to a high degree of accuracy still was not enough. Rate transparency had elevated the importance of incorporating market positioning against substitutable alternatives. IHG recognized that when a competitor changes its rate, the consumer's perception of IHG's rate also changes. Working with third party competitive data, the IHG team was able to analyze historical price, volume and share data to accurately measure price elasticity in every local market for multiple lengths of stay. These elements were incorporated into a system that also measured differences in customer elasticity based upon how far in advance the booking is being made relative to the arrival date. The incremental revenue from the system was significant as this new Price Optimization capability increased Revenue per Available Room (RevPAR) by 2.7%. IHG and Revenue Analytics, a pricing and revenue management consulting firm, were selected as finalists for the Franz Edelman Award for Achievement in Operations Research and the Management Sciences for their joint effort in implementing Price Optimization at IHG. |
In 2017, Holiday Retirement and Prorize LLC were awarded with the Franz Edelman Award for Achievement in Operations Research and the Management Sciences () for their use of operations research (O.R.) to improve the pricing model for more than 300 senior living communities. Holiday Retirement partnered with Prorize LLC, an Atlanta-based revenue management firm that leveraged O.R. to develop its Senior Living Rent Optimizer. The revenue management system developed by Prorize enabled a consistent and proactive pricing process across Holiday, while simultaneously providing optimal pricing recommendations for each unit in every one of their communities. As a result of their joint efforts, they were able to consistently raise revenues by over 10%. |
The Revenue Management Society is the industry body representing companies and practitioners working in this area. The Society traces its roots back to 2002 when Steve Marchant gathered a group of clients and colleagues to discuss revenue management issues of common interest. Initially the club was financed by Consultecom but in 2007 became a Society fully funded by the membership. Membership initially comprised companies in the travel and leisure sector. There are now over 60 corporate members from across Europe and from many industries. The Society's Mission Statement is "To define and promote best practice in the use of revenue and yield management techniques, through discussion and communication between the key users of these techniques within the Travel, Transportation and Leisure industries." To this end the Society organises member conferences, newsletters and supports University research projects |
Whereas yield management involves specific actions to generate yield through perishable inventory management, revenue management encompasses a wide range of opportunities to increase revenue. A company can utilize these different categories like a series of levers in the sense that all are usually available, but only one or two may drive revenue in a given situation. The primary levers are: |
This category of revenue management involves redefining pricing strategy and developing disciplined pricing tactics. The key objective of a pricing strategy is anticipating the value created for customers and then setting specific prices to capture that value. A company may decide to price against their competitors or even their own products, but the most value comes from pricing strategies that closely follow market conditions and demand, especially at a segment level. Once a pricing strategy dictates what a company wants to do, pricing tactics determine how a company actually captures the value. Tactics involve creating pricing tools that change dynamically, in order to react to changes and continually capture value and gain revenue. Price Optimization, for example, involves constantly optimizing multiple variables such as price sensitivity, price ratios, and inventory to maximize revenues. A successful pricing strategy, supported by analytically-based pricing tactics, can drastically improve a firm's profitability. |
When focused on controlling inventory, revenue management is mainly concerned with how best to price or allocate capacity. First, a company can discount products in order to increase volume. By lowering prices on products, a company can overcome weak demand and gain market share, which ultimately increases revenue. On the other hand, in situations where demand is strong for a product but the threat of cancellations looms (e.g. hotel rooms or airline seats), firms often overbook in order to maximize revenue from full capacity. Overbooking's focus is increasing the total volume of sales in the presence of cancellations rather than optimizing customer mix. |
Price promotions allow companies to sell higher volumes by temporarily decreasing the price of their products. Revenue management techniques measure customer responsiveness to promotions in order to strike a balance between volume growth and profitability. An effective promotion helps maximize revenue when there is uncertainty about the distribution of customer willingness to pay. When a company's products are sold in the form of long-term commitments, such as internet or telephone service, promotions help attract customers who will then commit to contracts and produce revenue over a long time horizon. When this occurs, companies must also strategize their promotion roll-off policies; they must decide when to begin increasing the contract fees and by what magnitude to raise the fees in order to avoid losing customers. Revenue management optimization proves useful in balancing promotion roll-off variables in order to maximize revenue while minimizing churn. |
Revenue management through channels involves strategically driving revenue through different distribution channels. Different channels may represent customers with different price sensitivities. For example, customers who shop online are usually more price sensitive than customers who shop in a physical store. Different channels often have different costs and margins associated with those channels. When faced with multiple channels to retailers and distributors, revenue management techniques can calculate appropriate levels of discounts for companies to offer distributors through opaque channels to push more products without losing integrity with respect to public perception of quality. |
Since the advent of the Internet the distribution network and control has become a major concern for service providers. When the producer collaborates with a powerful provider, sacrifices may be necessary, particularly concerning the selling price/commission rate, in exchange for the capacity to reach a certain clientele and sales volumes |
The revenue management process begins with data collection. Relevant data is paramount to a revenue management system's capability to provide accurate, actionable information. A system must collect and store historical data for inventory, prices, demand, and other causal factors. Any data that reflects the details of products offered, their prices, competition, and customer behavior must be collected, stored, and analyzed. In some markets, specialized data collection methods have rapidly emerged to service their relevant sector, and sometimes have even become a norm. In the European Union for example, the European Commission makes sure businesses and governments stick to EU rules on fair competition, while still leaving space for innovation, unified standards, and the development of small businesses. To support this, third party sources are utilized to collect data and make only averages available for commercial purposes, such as is the case with the hotel sector – in Europe and the Middle East & North Africa region, where key operating indicators are monitored, such as Occupancy Rate (OR), Average Daily Rate (ADR) and Revenue per Available Room (RevPAR). Data is supplied directly by hotel chains and groups (as well as independent properties) and benchmark averages are produced by direct market (competitive set) or wider macro market. This data is also utilized for financial reporting, forecasting trends and development purposes. Information about customer behavior is a valuable asset that can reveal consumer behavioral patterns, the impact of competitors' actions, and other important market information. This information is crucial to starting the revenue management process. |
After collecting the relevant data, market segmentation is the key to market-based pricing and revenue maximization. Airlines, for example, employed this tactic in differentiating between price-sensitive leisure customers and price-insensitive business customers. Leisure customers tend to book earlier and are flexible about when they fly and are willing to sit in coach seats to save more money for their destination, whereas business customers tend to book closer to departure and are typically less price sensitive. Success hinges on the ability to segment customers into similar groups based on a calculation of price responsiveness of customers to certain products based upon the circumstances of time and place. Revenue management strives to determine the value of a product to a very narrow micro-market at a specific moment in time and then chart customer behavior at the margin to determine the maximum obtainable revenue from those micro-markets. Micro-markets can be derived qualitatively by conducting a dimensional analysis. Business customers and leisure customers are two segments, but business customers could be further segmented by the time they fly (those who book late and fly in the morning etc.). Useful tools such as Cluster Analysis allow Revenue Managers to create a set of data-driven partitioning techniques that gather interpretable groups of objects together for consideration. Market segmentation based upon customer behavior is essential to the next step, which is forecasting demand associated with the clustered segments. |
Revenue management requires forecasting various elements such as demand, inventory availability, market share, and total market. Its performance depends critically on the quality of these forecasts. Forecasting is a critical task of revenue management and takes much time to develop, maintain, and implement; see Financial forecast. |
Quantity-based forecasts, which use time-series models, booking curves, cancellation curves, etc., project future quantities of demand, such as reservations or products bought. |
Price-based forecasts seek to forecast demand as a function of marketing variables, such as price or promotion. These involve building specialized forecasts such as market response models or cross price elasticity of demand estimates to predict customer behavior at certain price points. |
By combining these forecasts with calculated price sensitivities and price ratios, a revenue management system can then quantify these benefits and develop price optimization strategies to maximize revenue. |
While forecasting suggests what customers are likely to do, optimization suggests how a firm should respond. Often considered the pinnacle of the revenue management process, optimization is about evaluating multiple options on how to sell your product and to whom to sell your product. Optimization involves solving two important problems in order to achieve the highest possible revenue. The first is determining which objective function to optimize. A business must decide between optimizing prices, total sales, contribution margins, or even customer lifetime values. Secondly, the business must decide which optimization technique to utilize. For example, many firms utilize linear programming, a complex technique for determining the best outcome from a set of linear relationships, to set prices in order to maximize revenue. Regression analysis, another statistical tool, involves finding the ideal relationship between several variables through complex models and analysis. Discrete choice models can serve to predict customer behavior in order to target them with the right products for the right price. Tools such as these allow a firm to optimize its product offerings, inventory levels, and pricing points in order to achieve the highest revenue possible. |
Revenue management requires that a firm must continually re-evaluate their prices, products, and processes in order to maximize revenue. In a dynamic market, an effective revenue management system constantly re-evaluates the variables involved in order to move dynamically with the market. As micro-markets evolve, so must the strategy and tactics of revenue management adjust. |
Revenue management's fit within the organizational structure depends on the type of industry and the company itself. Some companies place revenue management teams within Marketing because marketing initiatives typically focus on attracting and selling to customers. Other firms dedicate a section of Finance to handle revenue management responsibilities because of the tremendous bottom line implications. Some companies have elevated the position of chief revenue officer, or CRO, to the senior management level. This position typically oversees functions like sales, pricing, new product development, and advertising and promotions. A CRO in this sense would be responsible for all activities that generate revenue and directing the company to become more "revenue-focused". |
Supply chain management and revenue management have many natural synergies. Supply chain management (SCM) is a vital process in many companies today and several are integrating this process with a revenue management system. On one hand, supply chain management often focuses on filling current and anticipated orders at the lowest cost, while assuming that demand is primarily exogenous. Conversely, revenue management generally assumes costs and sometimes capacity are fixed and instead looks to set prices and customer allocations that maximize revenue given these constraints. A company that has achieved excellence in supply chain management and revenue management individually may have many opportunities to increase profitability by linking their respective operational focus and customer-facing focus together. |
Business Intelligence platforms have also become increasingly integrated with the Revenue Management process. These platforms, driven by data mining processes, offer a centralized data and technology environment that delivers business intelligence by combining historical reporting and advanced analytics to explain and evaluate past events, deliver recommended actions and eventually optimize decision-making. Not synonymous with Customer Relationship Management (CRM), Business intelligence generates proactive forecasts, whereas CRM strategies track and document a company's current and past interactions with customers. Data mining this CRM information, however, can help drive a business intelligence platform and provide actionable information to aid decision-making. |
The ability for revenue management to optimize price based on forecasted demand, price elasticity and competitive rates has incredible benefits, and many companies are rushing to develop their own revenue management capabilities. Many industries are beginning to embrace revenue management and |
= = = European corn borer = = = |
The European corn borer ("Ostrinia nubilalis"), also known as the European corn worm or European high-flyer, is a moth of the family Crambidae which includes other grass moths. It is a pest of grain, particularly corn (maize or "Zea mays"). The insect is native to Europe, originally infesting varieties of millet, including broom corn. The European corn borer was first reported in North America in 1917 in Massachusetts, but was probably introduced from Europe several years earlier. Since its initial discovery in the Americas, the insect has spread into Canada and westward across the United States to the Rocky Mountains. |
The adult European corn borer is about long with a wingspan. The female is light yellowish brown with dark, irregular, wavy bands across the wings. The male is slightly smaller and darker. |
European corn borer caterpillars damage corn by chewing tunnels through many parts of the plant. This decreases agricultural yield. |
The European corn borer is native to Europe and was introduced to North America in the early 20th century. This moth plagues corn crops in France, Spain, Italy, and Poland. In North America, the European corn borer is found in eastern Canada and every U.S. state east of the Rocky Mountains. |
The European corn borer progresses through four developmental stages. These are the egg, larva, pupa, and adult. The insect is referred to as a borer in its larval stage and as a moth in its adult stage. The adult moths lay their eggs on corn plants. Larva hatch from the eggs. Larvae have five instars or sub-stages of development. The larval stage is followed by a period of diapause or hibernation in a pupa. During the pupal stage, the borers progress through metamorphosis in a suspended chrysalis. Following this intense period of development, an adult moth emerges from the pupa. The length of the pupal stage is determined by environmental factors such as temperature, number of hours of light, and larval nutrition, in addition to genetics. |
The bivoltine populations of European corn borers undergo the pupal stage twice, first in May and June and then again in July and August. During the winter, the European corn borer stays in its larval stage. Temperatures exceeding 50 degrees Fahrenheit (10 °C) induce the other developmental stages. The North American corn crop grows during these warmer months and provides a food source for the borers. |
The European corn borer is about 1 inch (2.5 cm) long with a 0.75- to 1-inch (1.9-2.5 cm) wingspan. The female is light yellowish brown with dark, irregular, wavy bands across the wings. The male is slightly smaller and darker. The tip of its abdomen protrudes beyond its closed wings. They are most active before dawn. The adults spend most of their time feeding and mating. Males and females of different strains have been found to produce differing sex pheromones. |
The fully grown larva is 0.75 to 1 inch (1.9-2.5 cm) in length. Larva vary in color from light brown to pinkish gray and have conspicuous small, round, brown spots on each segment along the body. As they grow they reach between 2 and 20 mm. The larva feed on the corn whorl and burrow into the stalk and ear. They have high mortality directly after emergence, but as soon as a feeding site is established, they have better survival rates. Total development before pupation lasts 50 days on average. |
Diapause, also known as hibernation, in European corn borers is induced by temperature and changes in daylight length. At higher temperatures, shorter photoperiods are sufficient to induce diapause. At 13.5 hours of light followed by 10.5 hours of dark, 100% of European corn borer larva entered diapause regardless of temperature with the range of 18 to 29 degrees Celsius. At high temperatures and long photoperiods, fewer larva enter diapause. |
Female corn borer moths lay clusters of eggs on corn leaves, usually on the undersides. The egg masses, or clusters, are laid in an overlapping configuration and are whitish yellow. As the larvae develop inside their eggs, the eggs become more and more transparent and the black heads of the immature caterpillars become visible. The caterpillars hatch by chewing their way out of the eggs. |
A female moth can lay two egg masses per night over 10 nights. The number of eggs per egg mass decreases each day. The female lays white eggs which become pale yellow and finally translucent before hatching. The eggs hatch within three to seven days of laying. |
The original European corn borers introduced to North America in the early 20th century established a population in New York. This population produced one brood per year. A second population was introduced in Massachusetts and spread to Long Island and the Hudson River Valley. This second population produces two broods per year. |
If presented with the opportunity, female European corn borers, like most moths, mate with multiple males in a reproductive strategy known as polyandry. Polyandry confers several benefits to the females. For example, multiple matings increase female fecundity and longevity, because female moths receive both nutritional resources and multiple spermatophores from males. Furthermore, mating with multiple males ensures that the female receives enough sperm to completely fertilize her eggs. Additionally, it increases the reproductive fitness of females, because it increases the genetic diversity of the female's offspring, and thus increasing the likelihood they will mate and pass on her genes. |
Female calling behavior in European corn borers involves the extrusion of the pheromone gland and release of sex pheromones. This calling behavior is influenced by the moth's circadian rhythm and tends to occur at night. Higher humidity also induces the calling behavior, while desiccation, or drying out, decreases the calling behavior. Both male and female European corn borers produce sex pheromones. |
There are two strains of European corn borers that are defined by their sex pheromone communication variant. These are the "Z" and "E" strains, named after the stereochemistry of the predominant isomer of 11-tetradecenyl acetate that they produce. The "E" variant of pheromone has a trans- configuration of hydrogen molecules around its double bond, while the "Z" variant has a cis- configuration. The "Z" strain produces a 97:3 ratio of "Z" to "E" isomer pheromone while the "E" strain produces a 4:96 ratio of "Z" to "E" isomer pheromone. A mixture of isomers is much more efficient in attracting the moth than a single component. The "Z" and "E" strains can mate and produce intermediate variants. |
Production of the specific pheromone blend in females is controlled by a single autosomal factor. Heterozygous females produce more "E" isomer than "Z". The response to these pheromones in the olfactory cells of male European corn borers is also controlled by a single autosomal factor with two alleles. Analysis of the electrophysiological signaling of olfactory cells showed that those with two "E" alleles responded strongly to the "E" isomer and weakly to the "Z" isomer. The opposite effect was found in homozygous "Z" males. Males heterozygous for this autosomal factor exhibited similar neurological responses to both isomers of pheromone. Finally, response to the pheromone is controlled by two factors, a sex-linked gene on the Z chromosome and another on an autosome. In species of Lepidoptea, sex is determined through the ZW sex-determination system where males are homozygous ZZ and females are heterozygous ZW. |
Males also produce sex pheromones that are structurally similar to those released by females. Composition of male pheromones is essential to female acceptance. The composition of male pheromones varies with age. Females prefer the pheromones of older males. Divergence of the pheromone composition can result in reproductive isolation and eventual speciation. This evolution is thought to take place in a concerted way between males and females within a population. |
During her adult life of 18 to 24 days, a female can lay a total of 400 to 600 eggs. The female European corn borer moth first lays eggs in June. The eggs are laid on the underside of corn plant leaves near the midvein. Around 90% of the eggs are laid on the leaf just below the primary ear leaf, and an equal number of eggs are laid above and below this leaf, with a slight bias towards the lower leaves. The egg masses are all laid within five leaves of the central ear leaf. Brood sizes range from 15 to 30 eggs and egg masses are about 6 mm in diameter. The period of egg laying is about 14 days with an average of 20 to 50 eggs per day. |
The male European corn borer produces a spermatophore ejaculate that contains spermatozoa to fertilize the female and protein to nourish the female, a nuptial gift. The cost of producing a spermatophore is relatively low compared to the female investment in oviposition. Males mate an average of 3.8 times during their life. The average refractory period between matings for the male is 1.6 days. With each successive mating, the volume of the spermatophore decreases. This decreased spermatophore volume is associated with a decrease in female fecundity and fertility. Females who mate with males that have already mated are less likely to deposit all of their eggs. |
The European corn borer lives and feeds primarily on field corn, but also eats sweet corn, popcorn, and seed corn. The first generation of corn borers which develops during the late spring feeds on the leaves and stalks of corn plants. In addition, the second generation feeds on the ear of corn, the leaf sheath, and the ear shank. If a third generation is produced, it will feed on the ear, the leaf sheath, and the ear shank. |
When corn is not abundant or near the end of the harvest season, European corn borers will infest lima beans, peppers, potatoes, and snap peas. Rarely, these moths will live on other grains, soybeans, or flowers. |
The European corn borer gets its name from its habit of boring holes into all components of the corn plant. The damage to the leaves reduces photosynthesis. Damage to the corn stalk decreases the amount of water and nutrients the plant can transport to the ear. European corn borers also eat the ear—which reduces crop yield—and the ear shank which often results in the ear falling to the ground, making it unharvestable. |
Biological control agents of corn borers include the hymenopteran parasitoid of the genus "Trichogramma", the fungus "Beauveria bassiana" and the protozoa "Nosema pyrausta". |
Bt corn, a variety of genetically modified corn, has had its genome modified to include a synthetic version of an insecticidal gene from the "Bacillus thuringiensis kurstaki". As a result, the corn variety produces a protein that kills the larvae of Lepidoptera, the taxonomic order which includes the European corn borer. |
Immature corn shoots accumulate a powerful antibiotic substance, DIMBOA, that serves as a natural defense against a wide range of pests and is also responsible for the relative resistance of immature corn to the European corn borer. |
When planting Bt corn, farmers must plant an area of refuge corn. A refuge area is an area of crops that do not contain the insecticidal genes. This refuge area is necessary is to prevent the European corn borer and other pests from developing resistance to the Bt gene. Insects who feed on the non-Bt crops will not develop resistance, but will continue to mate with any moths that survive after eating the genetically-modified corn. It is rare for an insect to survive after eating Bt corn, but when these resistant individuals mate with moths from the refuge area, the offspring they produce will still be susceptible to the toxin. Studies on the dispersal of European corn borers found that planting refuge corn within a half-mile of Bt crops prevents resistance. |
The presence of European corn borers on corn crops and the damage caused by them increases the likelihood of stalk rot caused by the pathogen "Fusarium graminearum". The tunneling done by European corn borers makes it easier for "F. graminearum" to infect corn stalks and increases the amount of necrotic stalk tissue. The presence of "F. graminearum" in corn infested by European corn borers also speeds the development of larva. |
With the increase in temperature associated with climate change, it is predicted that the habitable region of the European corn borer will expand. Additionally, an increase in the number of generations is expected. The CLIMEX model, which models organisms' response to climate change, predicts that the area of arable land affected by the European corn borer in Europe will increase by 61%. |
= = = History of Virginia Beach, Virginia = = = |
The history of Virginia Beach, Virginia, goes back to the Native Americans who lived in the area for thousands of years before the English colonists landed at Cape Henry in April 1607 and established their first permanent settlement at Jamestown a few weeks later. The Colonial Virginia period extended until 1776 and the American Revolution, and the area has been part of the Commonwealth of Virginia ever since. |
Since 1634, area known today as Virginia Beach has been part of the same unit of local government, except for 11 years. In 1952, when resort Town of Virginia Beach became an independent city, followed by the rest of Princess Anne County which whom it was reunited and politically consolidated by mutual approval of residents to form a new independent city in 1963. Selecting the better-known name of the oceanfront strip area, Virginia Beach has since grown to become the most populated of the city in Hampton Roads, which are each linked by the Hampton Roads Beltway which crosses the harbor of Hampton Roads through two large bridge-tunnels. |
Chesepians were the Native American (American Indian) inhabitants of the area now known as South Hampton Roads in Virginia during the Woodland Period and later prior to the arrival of the English settlers in 1607. They occupied an area which is now the Norfolk, Portsmouth, Chesapeake and Virginia Beach areas. They were divided into five provinces or kingdoms: Weapemiooc, Chawanook, Secotan, Pomouic and Newsiooc, each ruled by a king or chief. To their west were the members of the Nansemond tribe. |
The main village of the Chesepians was called Skicoak, located in the present independent city of Norfolk. The Chesepians also had two other towns (or villages), Apasus and Chesepioc, both near the Chesapeake Bay in what is now Virginia Beach. Of these, it is known that Chesepioc was located in the present Great Neck area. Archaeologists and other persons have found numerous Native American artifacts, such as arrowheads, stone axes, pottery, beads, and skeletons in Great Neck Point. |
Politically, the area was dominated by the Virginia Peninsula-based Powhatan Confederacy. Although the Chesepians belonged to the same eastern-Algonquian speaking linguistic group as members of the Powhatan Confederacy across Hampton Roads, the archaeological evidence suggests that the original Chesepians belonged to another group, the Carolina Algonquian. Powhatan, whose real name was Wahunsunacock, was the most powerful chieftain in the Chesapeake Bay area, dominating more than 30 Algonquin-speaking tribes. The Chesepians did not belong to Powhatan's alliance, but instead defied him. |
By 1607, around the time the first permanent English settlement was founded, the Chesaspeakes had united to fight the Powhatan Confederacy, suffering heavy losses. The last time the Chesaspeakes were mentioned in historical documents was in 1627. The Chesaspeakes have no pure descendants. Their tribe, totally defeated by Powhatan, was wiped out completely during this time frame by disease and attrition. According to William Strachey's "The Historie of Travaile into Virginia Britanica" (1612), the Chesepians were wiped out by Powhatan because Powhatan's priests had warned him that "from the Chesapeake Bay a nation should arise, which should dissolve and give end to his empire. "Local legend has it that an advisor to the Chief of the Powhatan tribe had a vision in which strangers from the East would come and take their land. Having no prior knowledge of the Europeans that would eventually land at Cape Henry, the Powhatans assumed the vision implicated the Chesepians. The Powhatans wiped out the entire Chesepeian tribe in a proactive defensive measure. Little did they know that the vision was correct. In 1607, a group of three ships ("The Susan Constant, The Godspeed and The Discovery), "led by Captain Christopher Newport, landed at Cape Henry. This group of 104 men and boys would move inland and establish the first permanent English settlement at Jamestown. |
The Spanish sailed past the Chesapeake bay and landed in Chincoteague (Virginia) in 1524. Spanish explorers also mapped the Cape Henry coast. The English soon followed with an exploration party under the auspices of Sir Walter Raleigh. His men explored the area between Cape Henry and Cape Lookout in July and August 1584. The first English colony was established by John White on Roanoke Island. However, the colony disappeared, giving rise to the legend of a mysterious Lost Colony. It took more than a dozen years before England sent another expedition to colonize the area, but this attempt failed as well. |
The expedition that founded the first permanent settlement set sail on December 19, 1606 from Blackwall, England on three ships commanded by Captain Christopher Newport. It consisted of 105 men and boys sponsored by the proprietary London Company section of the Virginia Company. They had an unusually long voyage of 144 days. On April 26, 1607, they made their first landfall at Cape Henry, in the northeastern part of today's independent city of Virginia Beach, a point where the Chesapeake Bay meets the Atlantic Ocean. It was named in honor of Henry Frederick, Prince of Wales, the eldest son of King James I of England. However the settlers left the area under orders from England to seek a site further inland which would be more sheltered from ships of competing European countries. |
Today, the site of their "First Landing" is within the boundaries of Joint Expeditionary Base East, a Navy installation used for training by the Army, U.S. Army, and Marines. A memorial cross near the landing site and the historic Cape Henry Light are accessible to the general public. First Landing State Park (formerly Seashore State Park) nearby was named to commemorate this event. |
In addition to the landing site itself, a nearby settlement called Henry Town near the mouth of the Lynnhaven River was first described by name in a 1613 letter by the Virginia's lieutenant governor, Samuel Argall, who wrote of sending a fishing ship "to Henries Towne for the reliefe of such men as were there." Other extant documents mention several forts at the mouth of the Chesapeake Bay as early as 1610, possibly including Henry Town. These records indicate that settlement at Henry Town was contemporary with the settlement at Jamestown. However, most of the archaeological finds at the Henry Town site date from the middle rather than the early 17th century. Some discoveries suggest that the site is connected to Adam Thoroughgood's nearby tobacco plantation, which dates to about 1635. |
The first written record of the name "Norfolk" is in the land books. It says: "at court houlden in the Lower County of New Norfolke the 15th May 1637 [present:] Adam Thorowgood Esq.r". John Sibsey, Edward Windham, William Julian, Francis Mason and Robert Cramm were also present. Thorowgood was commander and presiding justice of the two distinct parishes. He was an important figure in the early history of Virginia Beach. |