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Southwestern university a large state college in stephenville

27/11/2021 Client: muhammad11 Deadline: 2 Day

Forecasting Problem

Discussion Questions

1. Develop a forecasting model, justifying its selection over other techniques, and project attendance through 2007.

2. What revenues are to be expected in 2006 and 2007?

3. Discuss the school's options.

Case Study (Southwestern University)

Southwestern University (SWU), a large state college in Stephenville, Texas, enrolls close to 20,000 students. The school is a dominant force in the small city, with more students during fall and spring than permanent residents. Always a football powerhouse, SWU is usually in the top 20 in college football rankings.

Since the legendary Bo Pitterno was hired as its head coach in 1999 (in hopes of reaching the elusive number 1 ranking), attendance at the five Saturday home games each year has increased. Prior to Pitterno's arrival, attendance generally averaged 25,000 to 29,000 per game. Season ticket sales bumped up by 10,000 with just the announcement of the new coach's arrival. Stephenville and SWU were ready to move to “the big time!”

The immediate issue facing SWU, however, was not NCAA ranking. It was capacity. The existing SWU stadium, built in 1953, has seating for 54,000 fans. The table below indicates attendance at each game for the past six years.

One of Pitterno's demands upon joining SWU had been a stadium expansion, or possibly even a new stadium. With attendance increasing, SWU administrators began to face the issue head-on.

Pitterno had wanted dormitories solely for his athletes in the stadium as an additional feature of any expansion.

SWU's president, Dr. Joel Wisner, decided it was time for his vice president of development to forecast when the existing stadium would "max out." The expansion was, in his mind, a given. But Wisner needed to know how long he could wait. He also sought a revenue projection, assuming an average ticket price of $30 in 2006 and a 10% increase each year in future prices.

Southwestern University Football Game Attendance, 2000-2005

2000

GAME

ATTENDEES OPPONENT

1 37,100 Baylor

2a 41,600 Texas

3 39,400 LSU

4b 25,200 Arkansas

5 37,100 USC

2001

GAME

ATTENDEES OPPONENT

1 36,200 Oklahoma

2a 41,300 Nebraska

3 38,500 UCLA

4b 24,300 Nevada

5 37,200 Ohio State

2002

GAME

ATTENDEES OPPONENT

1 34,700 TCU

2a 47,800 Texas Tech

3 42,100 Alaska

4b 26,400 Arizona

5 38,500 Rice

2003

GAME

ATTENDEES OPPONENT

1 42,700 Arkansas

2a 48,100 Missouri

3 44,600 Florida

4b 29,200 Miami

5 41,300 Duke

2004

GAME

ATTENDEES OPPONENT

1 43,600 Indiana

2a 49,100 North Texas

3 45,300 Texas A&M

4b 32,700 Southern

5 48,600 Oklahoma

2005

GAME

ATTENDEES OPPONENT

1 47,400 LSU

2a 51,200 Texas

3 46,500 Prairie View A&M

4b 35,200 Montana

5 48,700 Arizona State

(a) Refer to Homecoming games.

(b) During the fourth week of each season, Stephenville hosted a hugely popular Southwestern crafts festival. This event brought tens of thousands of tourists to the town, especially on weekends, and had an obvious negative impact on game attendance.

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