The Akron Zoological Park During the late 1980s, global changes in consumer preferences for radial tires, inflation, and changes in governmental priorities, almost resulted in the permanent closing of the Akron Children’s Zoo. Lagging attendance and a low membership level did not help matters
UPES Solved Assignments
UPES Semester 1 Solved Assignments for MBA/BBA
Quantitative
Techniques for Management Applications
Assignment 1
Forecasting
The
Akron Zoological Park
During the late 1980s, global changes in
consumer preferences for radial tires, inflation, and changes in governmental
priorities, almost resulted in the permanent closing of the Akron Children’s
Zoo. Lagging attendance and a low membership level did not help matters. Faced
with uncertain prospects, the city of Akron opted out of the zoo business. In
response, the Akron Zoological Park was organized as a corporation to operate
the zoo under contract with the city.
Annual Attendance at the Akron Zoological Park
|
|
Admission Fee ($) |
||
Year |
Total Persons |
Adult |
Child |
Group |
1998 |
117,874 |
4.00 |
2.50 |
1.50 |
1997 |
125,363 |
3.00 |
2.00 |
1.00 |
1996 |
126,853 |
3.00 |
2.00 |
1.50 |
1995 |
108,363 |
2.50 |
1.50 |
1.00 |
1994 |
133,762 |
2.50 |
1.50 |
1.00 |
1993 |
95,504 |
2.00 |
1.00 |
.50 |
1992 |
63,034 |
1.50 |
.75 |
.50 |
1991 |
63,853 |
1.50 |
.75 |
.50 |
1990 |
61,417 |
1.50 |
.75 |
.50 |
1989 |
53,353 |
1.50 |
.75 |
.50 |
To be successful, the zoo must maintain its
image as a quality place for its visitors to spend their time. Its animal
exhibits are clean and neat. The animals, birds, and reptiles look well cared
for. As resources become available for construction and continuing operations,
the zoo also keeps adding new exhibits and activities. The independent
organization’s efforts seem to be working, because attendance increased from
53,353 in 1989 to an all-time record of 133,762 in 1994.
Due to its northern climate, the zoo’s open
season lasts from mid-April until mid-October. It reopens for 1 week at
Halloween and for the month of December. Zoo attendance depends largely on the
weather. For example, attendance was down during the month of December 1995,
which established many local records for the coldest temperature and the most
snow. Variations in weather also affect crop yields and prices of fresh animal
foods, thereby influencing the costs of animal maintenance.
In normal circumstances, the zoo may be able to
achieve its target goal and attract an annual attendance equal to 40% of its
community. Akron has not grown appreciably during the past decade. But the zoo
became known as an innovative community resource, and as indicated in the
table, annual paid attendance has doubled. Approximately 35% of all visitors
are adults. Children account for one half of the paid attendance. Group
admissions remain a constant 15% of attendance.
The zoo does not have an advertising budget. To
gain exposure in its market, it depends on public service announcements, the
zoo’s public television series, and local press coverage of its activities.
Many of these activities are only a few years old and are a strong reason why
attendance has increased.
Although the zoo is a nonprofit organization,
it must ensure that its income sources equal or exceed operating and physical
plant costs. Its continued existence remains totally dependent on its ability
to generate revenues while reducing its expenses.
DISCUSSION
QUESTIONS
1. The president of the Akron Zoo has asked you to calculate the
expected gate admittance figures and revenues for both 1999 and 2000. Would
simple linear-regression analysis be the appropriate forecasting technique?
2. Besides admission price, what other factors that influence
annual attendance should be considered in the forecast?
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