1. ¹is the Project Manager — Rental Car at PROS Revenue Management. Previously, he was Manager of Strategic Analysis at Dollar Rent A Car Systems, Inc., where he worked in the Revenue Management Department since May, 1998. Prior to that he attended the Colorado School of Mines, where he earned a BSc and MSc degree in economics. The Strategic Analysis section at Dollar was responsible for revenue management operations research, which included dynamic pricing, decision support, statistical analysis, large system integration, performance measurement, elasticity quantification, competitive analysis, game theory, education and training. In addition, Montgomery has recently served as President and Chair of the Revenue Management Section of INFORMS (Institute for Operations Research and Management Science), and has spoken at numerous international conferences.
2. ²teaches Management Science and Statistics at the Richard Ivey School of Business, University of Western Ontario. He holds degrees from the University of Guelph and the Ivey School of Business. Research interests include pricing and revenue management along with the strategic use of management science/operations research. He worked in software development prior to returning to graduate school.

Correspondence: Montgomery Blair, PROS Revenue Management, 3100 Main Street, Suite 900, Houston, TX, 77002, USA, Tel: +1 713 335 8011; Email: mblair@prosrm.com

Revised 1 October 2001.

Abstract

Revenue management has experienced tremendous growth since its inception in the airline industry. The practice of dynamically pricing a perishable product across different market segments continues to be applied across an everincreasing set of business arenas. The proliferation of revenue management can be attributed to its microeconomic foundations (grounded in supply and demand), as well as the numerous well-cited success stories (American Airlines, National Car Rental) and failures (People's Express) that follow from its application or lack thereof. The continued success of revenue management hinges upon the ability to link organisational performance to the pricing and capacity decisions of revenue management systems. This link both reinforces the financial gains attributable to revenue management and indicates opportunities for future improvement. This paper outlines Performance Monitor, a phased approach to performance measurement designed and implemented at Dollar Car Rental. We also present and discuss some examples of Phase I, which is currently in use.