BSOP 330 Week 2 Southwestern Case study: 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.