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  6. Time- and Capacity-Based Measurement of Restaurant Revenue

Time- and Capacity-Based Measurement of Restaurant Revenue

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Thompson8_Time_and_capacity.pdf (519.04 KB)
Permanent Link(s)
https://hdl.handle.net/1813/71884
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SHA Articles and Chapters
Author
Thompson, Gary
Sohn, Heeju
Abstract

In this article, the authors examine how a common metric of revenue performance—RevPASH, or revenue per available seat-hour—is calculated. In a simple example, a real restaurant, and an extensive simulation study, the authors find inaccuracies in the existing approaches to calculating RevPASH. However, the extent of the inaccuracy is much greater when RevPASH is calculated based on check-open times rather than on the time interval from check open to check close. Since accurate RevPASH values are important in guiding managers’ revenue-enhancing decisions, the article’s findings have importance for practice. Furthermore, as RevPASH has been a commonly used metric for academic research, the article’s findings are important for those performing research on restaurant revenue management.

Date Issued
2009-10-01
Keywords
restaurant revenue management; revenue per available seat-hour; RevPASH
Rights
Required Publisher Statement: © Cornell University. Reprinted with permission. All rights reserved.
Type
article

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