Certified Supply Chain Professional (CSCP) Practice Exam

What action do airlines typically take to manage demand effectively?

1. Encourage bulk purchases

2. Promote early ticket purchases and penalize last-minute buyers

3. Limit the number of flights based on demand

4. Offer free cancellations for last-minute tickets

The correct answer is: Promote early ticket purchases and penalize last-minute buyers

Airlines typically promote early ticket purchases and penalize last-minute buyers to manage demand effectively. This strategy involves incentivizing customers to buy tickets well in advance of their travel dates. By doing so, airlines can better predict demand and optimize seat allocations. Early purchases help in maximizing revenue, as these tickets are often sold at higher prices compared to last-minute fares. Additionally, by potentially increasing prices for last-minute tickets or implementing fees for such purchases, airlines discourage consumers from waiting until the last minute to book their flights. This price differentiation helps to smooth out demand and ensures that flights are filled more consistently, reducing the likelihood of empty seats and improving overall profitability. In contrast, encouraging bulk purchases may not be a viable strategy for airlines as it could lead to an oversupply of seats if travelers do not utilize the purchased tickets. Limiting the number of flights based on demand can sometimes lead to missed opportunities and decreased customer options. Offering free cancellations for last-minute tickets might attract late bookings but can also lead to an unpredictability in demand, complicating capacity planning for the airlines.