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Business and Management.
Yield management in the hotel industry has been described as a method of profitably managing fixed capacity. A critical element of yield management is the decision strategy employed as this determines the degree to which optimum solutions are generated. Recent research has indicated that the use of technology assisted decision optimising models (the management science model) would greatly improve the optimisation of decisions by minimising the need to employ guesswork in achieving optimum solutions. Despite this assurance, yield management remains couched in uncertainty through being inextricably associated with forecasting future demand for a perishable product in an increasingly competitive environment. The consequential pressures on the decision maker have afforded the opportunity for human idiosyncrasies to play a significant role in the decision making process. The primary objective of this study, therefore, is to gain an insight into how decisions are made in the yield management environment of the hospitality industry. The study reviews current literature on decision strategies, exploring in particular models of decision making, heuristics, biases and psychodynamic forces associated with unconscious decision making, and their respective influences on decision outcomes. The methodology chosen to elicit the data involved the use of a non-positivistic paradigm, incorporating an interpretative approach. The strategy employed within this methodology utilised phenomenological approaches to interviewing respondents and analysing data. Specific attention was also given to developing a methodology to assist the author in accessing the unconscious. The findings of this research reveal that the management science model of decision making has been disregarded in favour of decision strategies, wherein, according to the respondents, human intervention plays a more significant role. The findings also suggest that this human intervention has actively facilitated, and has simultaneously been facilitated by the potential for decision makers to fall into psychological traps, and make systematically biased errors. The research also concludes that the unconscious forces impacting on decision makers forces them to rationalise the irrational, thus suggesting that conscious and unconscious practices, with regard to decision making strategies, are inextricably linked.
Kely, T.:An Exploratory Study Of How Decisions Are Made In The Yield Management Environment Of Four Star Dublin Hotels. Masters Dissertation. Dublin Institute of Technology, 2004.