Reference no: EM133380116
Case: CRF Zoological Park: CRF is a tire - industry, and as a part of Corporate Social Responsibility (CSR), they started a children's zoo long ago. But later, due to the decline in CRF's tire industry, inflation and changes in governmental policies almost resulted in the permanent closing of the Children's Zoo. Also, there was no hope due to lagging attendance and a low level of memberships. Because of such situations, CRF opted out of the zoo business. As a result, Zoological Park was organized as a corporation to contract with the city for its operation. Now the CRF Zoological Park is an independent organization that handles all activities of the Children's Zoo for the city. For growth and success, it needs to maintain its image as a high-quality place for its visitors in the zoo; the animals, birds, and reptiles are well cared for. Due to the plentiful availability of resources for construction and operations which are taking place, the zoo keeps adding new exhibits and activities. All such efforts result in increased attendance.
Due to the region's climatic conditions, the zoo remains open from mid-April to mid-October. It reopens for one week at Halloween and also in December month. Zoo attendance varies according to the weather. Variations in weather also affect crop yields and prices of fresh animal foods, affecting the costs of animal maintenance.
The zoo achieves its target goal in normal conditions and attracts significant attendance. CRF has not grown appreciably during the past decade. But then also the zoo made its presence as an innovative community resource, which can also be concluded from the table below. It is also clear that 35% of all visitors are adults. In the case of children, it is one-half of the paid attendance. While group attendance are almost remains constant at 15 percent.
For publicity purposes, the zoo does not have any advertising budget. It depends on public service announcements, like its own public television series, and local press coverage, and social gatherings. It resulted in increases in annual zoo attendance.
From the above discussion, it is clear that the zoo is a nonprofit organization, but it is necessary to ensure that its sources of income equal or exceed operating and other costs. It is also required to its continued existence.
Discussion Questions
(a) The President of the CRF Zoo asked you to calculate the expected gate admittance figures and revenues for 1996 and 1997. Would simple linear regression analysis be the appropriate forecasting technique?
(b) What other factors that influence annual attendance should be considered in the forecast beside the admission price?