Identifying revenue opportunities via capacity analysis

Although capacity considerations are an integral part of revenue management (RM), there is relatively little literature on the subject. We discuss the dimensions of capacity and describe the capacity analysis model developed by Computer Aided Manufacturing – International (CAM‐I). Capacity is not only physical, but includes personnel, processes and purchases (supply chain). We illustrate how examining why physical capacity is non‐productive or idle can lead to revenue enhancement opportunities. We also illustrate how knowledge of capacity utilization can aid in revenue projection and in evaluating revenue forecasts. CAM‐I capacity analysis can be a valuable RM tool.