During the late 1970's in Atlanta, changes in consumer preferences for radial automobile tires, the internationalization of
Question:
During the late 1970's in Atlanta, changes in consumer preferences for radial automobile tires, the internationalization of the rubber industry, the economic ravages of rapidly increasing general price levels, and changes in governmental priorities almost resulted in the permanent closing of the Atlanta Children's Zoo. Lagging attendance and a low level of memberships did not help matters. Faced with the uncertain prospect of continuing its zoo operations, the City of Atlanta sought to reduce its commitment. As a response, the Atlanta Zoo Park was organized as an eleemosynary corporation and contracted with the city to operate the zoo.
It remains the mission of the Atlanta Zoo Park to manage its resources for the recreation and education of the people of Atlanta and surrounding communities and to promote the conservation of wildlife. To be successful, the Atlanta Zoo Park must maintain its image as a quality place for its visitors to spend their time. Its animal exhibits are clean and neat. They are easy for all to see and enjoy. The animals, birds, and reptiles look well cared for. Flowers and plants abound. As resources become available for construction and continuing operations, they keep adding new exhibits and new activities. For example, their attendance has increased from 53,353 people in 1993 to its all time record of 133,762 people in 1998. As a unique institution, the Atlanta Zoo Park presents a balanced program of education, recreation, conservation, and scientific activities.
Due to its climate, the zoo conducts its open season from mid-April until mid-October. The zoo reopens for one week at Halloween and for the month of December. Its season is shorter than many of its local competitors. Also, it is totally dependent on the largess of nature. For example, the month of December, 1999, established many local records for the coldest temperature on this date, the lowest wind chill factors, and the most snow. Due to this record extreme cold and snow, several evenings of the Holidays Lights were canceled. Attendance at this event in 1998 was over 48,000 patrons. In December, 1999, the Holidays Lights' attendance did not exceed 21,000 people. Further, the spring of 1999 was one of the wettest on record. This precipitation severely reduced paid admissions. The variations in weather also effect crop yields and prices of fresh animal foods. A drought in 1998 and too much rain in 1999 had a heavy impact on the costs of animal maintenance. The weather can cause variations on both the cost of animal feed and on paid park admissions. In less extreme circumstances, the zoo may be able to achieve its target goal and attract an annual attendance equal to 40% of its community. Its surrounding community has not grown appreciably during the past decade, but as indicated in Table 1, as the zoo became known as an innovative community resource the annual paid attendance had doubled. Approximately thirty five percent of all visitors are adults. Children account for one half of the paid attendance. Group admissions remain a constant fifteen percent of zoo attendance.
To gain exposure in its market, the zoo must create media events. It must develop exciting activities that pass threshold as newsworthy. The Atlanta Zoo does not possess access to funds that are sufficient to permit is to advertise on commercial television. The budgetary pressures just do not permit advertising expenditures. Basically, the zoo remains totally dependent on public service announcements, the zoo's public television series, and local press coverage of the activities and social happenings at the zoo. In past years, these events have served to generate media attention to the zoo's existence as a community resource. Many of these activities are but a few years old. They are a strong reason that annual zoo attendance has increased.
Although it possesses federal nonprofit status under Section 501 (c)3 of the Internal Revenue Code, the zoo must seek to ensure that its sources of income equal or exceed its operating and physical plant costs. Its continued existence and its promotion of wildlife conservation remain totally dependent on its ability to generate revenues and to reduce its expenses.
Admission Fee
AdultChildGroup
--------------------------------------------
2001117,874$4.00 $2.50 $1.50
2000125,3633.002.001.00
1999126,8533.002.001.50
1998108,3632.501.501.00
1997133,7622.501.501.00
199695,5042.001.00.50
199563,0341.50.75.50
199463,8531.50.75.50
199361,4171.50.75.50
199253,3531.50.75.50
______________________________________________________________
Below the printouts of the Regression Analysis for this forecasting problem.The predicted number of annual attendance is the dependent variable (Y) and the admission fees of Adult, Children, and Group (X1, X2, X3) are the independent variables.Comment on these printouts - are these admission fees "good" enough (i.e., predictable enough) to be used as solo independent variables for the purposes of forecasting annual attendance?
Regression Analysis
a) Y and X1
----------------------------------------------------------------
The regression equation is
Annual Attendance = 24061 + 30816 Adult-Fee
Sd. Error = 18465R2 = 69.7%
b) Y and X2
----------------------------------------------------------------
The regression equation is
Annual Attendance = 38651 + 41694 Child-Fee
Sd. Error = 17439R2 = 73.0%
c) Y and X3
----------------------------------------------------------------
The regression equation is
Annual Attendance = 41324 + 63075 Group-Fee
St. Error = 19132R2 = 67.4%
d) Y and X1, X2, X3
----------------------------------------------------------------
The regression equation is
Annual Attendance = 52604 - 26541Adult-Fee + 74705Child-Fee + 2971 Group-Fee
Sd. Error = 19788R2 = 73.9%
e) Y and X5 (X5 - the year where 1992 as [1] and 2001 as [10])
----------------------------------------------------------------
The regression equation is
Annual Attendance = 44352 + 9197 Year
Sd. = 15877R2 = 77.6%
are these admission fees "good" enough (i.e., predictable enough) to be used as solo independent variables for the purposes of forecasting annual attendance?