KAREMA

KAREMA – Bottleneck-oriented Capacity Control Through Revenue Management

Client: ThyssenKrupp VDM GmbH

Duration: From 2007 to 2011

 

Responsible

  • Dr. Matthias Wichmann
  • André Hintsches

 

Project Partners

  • ThyssenKrupp VDM GmbH

 

Initial Situation and Problem

In the iron and steel industry, as in many industry branches, a short-term adoption of mid-term production capacity to a stochastic and volatile demand is not possible due to the necessary time lag and resulting downtime. This lack of flexibility results in the importance of efficient capacity allocation to maximize the overall contribution margin. An increasing popular instrument to control capacity allocation in the service industry is the so-called revenue management (or yield management). In some industry branches it is employed as the main instrument to maximize revenue.

 

Objective and Approach

The first phase of the projects includes three consecutive objectives:

  • Conception and development of a tool for decision support for a bottleneck-oriented evaluation of customer requests for a chosen product area of ThyssenKrupp VDM.
  • Implementation and evaluation of the developed tool in form of a run-capable prototype.
  • Conceptual extension and evaluation of the developed approach for deceision support for further product areas.

Based on the objectives of the first phase, the objectives of the second phase include the conception and prototypical implementation of a dnymic bid-price-management to increase the robustness of the revenue-management-tool.

The third phase of the project includes the intensive monitoring of the roll-out and implementation of the revenue management tool in the context of an APS-system.

 

Further Information

So far, the KAREMA-project lead to the following publications: