BCG Vantage case prep: revenue management.

Start with the exact vacancy and the instructions you received. Identify the industry knowledge, analytical tools and decisions the role calls for. Ask whether the exercise is a live discussion or a prepared analysis, whether you will present, and which materials you may use.

The preparation below applies when revenue management has actually been named. If your role is in another specialism, do not memorise airline fare examples in the hope that every Vantage case is the same. Build an equivalent study map for that vacancy, then practise turning its technical evidence into a recommendation a case team could use.

Revenue management involves decisions about what to sell, to whom, at which price and when, often with capacity that loses its value if unused. An empty airline seat cannot be sold after the flight departs. Selling it cheaply today can still be a poor decision if it replaces a more valuable sale tomorrow.

Build your study map around demand, pricing, seat inventory, forecasting and performance measurement. Explain how those pieces affect each other before reaching for an advanced model.

A technically attractive pricing recommendation still needs a way to operate, monitor results and respond when demand differs from forecast.

Consider this original simplified exercise. A flight has 40 seats left. A group offers to buy 20 seats now at £100 each. The airline expects 30 later passengers willing to pay £220 each. Incremental cost is £20 per passenger. Ignore taxes, cancellations and network effects for the initial calculation.

If the airline rejects the group and sells 30 later seats, contribution is 30 × £200 = £6,000, with ten seats left empty. If it accepts the whole group, only 20 seats remain for later customers. Contribution becomes 20 × £80 + 20 × £200 = £5,600.

Accepting the group adds £1,600 of contribution but displaces £2,000 from ten later customers. Under the stated demand scenario, rejecting the full group is better by £400.

If a partial booking is possible, selling ten seats to the group and protecting 30 for later demand produces £800 + £6,000 = £6,800. The option set matters as much as the arithmetic.

Now suppose later demand is only 20 passengers. Rejecting the group produces £4,000 contribution. Accepting all 20 group passengers produces £5,600 because no later passenger is displaced.

The commercial issue is the uncertainty about later demand. You need booking history for comparable departures, current booking pace, time remaining, events and other information that improves that forecast. A forecast is not the same thing as committed sales.

For the original 30-passenger scenario, the full group must cover the £2,000 of displaced contribution. Across 20 group passengers, that requires £100 contribution each, or a £120 fare after the £20 incremental cost. That gives you a useful negotiation threshold for this simplified scenario.

The next question is not “Which formula do I memorise?” It is “What evidence changes the opportunity cost of accepting this booking?”

A concise recommendation could be:

At the current forecast, I would offer the group ten seats or seek at least £120 per seat for the full twenty. Accepting all twenty at £100 would displace higher-value demand and reduce contribution by £400. Before committing, I would check the late-booking forecast because the recommendation changes if only twenty later passengers arrive.

That answer states an action, the economic reason and the uncertainty worth resolving. It leaves room for the interviewer to challenge the demand estimate, the feasibility of a partial booking or the customer relationship.

If new information arrives, update the answer. Defending an old conclusion after its assumptions change is less useful than explaining exactly why the recommendation moves.

Domain work often fails through mismatched definitions rather than difficult mathematics. Check whether a figure measures bookings or passengers flown, gross fare or net revenue, a flight leg or an entire itinerary, and the same departure period.

For a hotel case, similarly distinguish occupancy, average room rate and revenue per available room. A higher average rate can accompany lower total revenue if occupancy falls enough. For a subscription case, distinguish users, paying accounts, recurring revenue and contribution.

Keep the units beside every calculation. If two sources disagree, compare their scope and timing before combining them. Explain the measure you selected and why it fits the decision.

First, map the vacancy into the domain concepts you need to explain. Second, answer one narrow commercial question using primary company, industry or regulatory sources, keeping definitions and dates. Third, solve a small numerical exercise with a changed assumption. Fourth, present the result to a non-specialist and answer their questions. Fifth, repeat under the confirmed interview conditions.

Ask the reviewer to challenge your biggest assumption and request a shorter answer. If the calculation is right but the recommendation is unclear, practise synthesis. If the conclusion depends on a definition you cannot explain, return to the domain concept. That is how you turn specialist knowledge into interview-ready judgement.