MGT $1220-$ Strategic Capacity Planning and Demand Management

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Group assignment $1-$ Case Study

Cascades Swim Club

Due Date: February $17$th$,23$:$59$ EST

The Cascades Swim Club has $300$ stockholders, each holding one share of stock in the club. A share of

club stock allows the shareholder$$s family to use the club$$s heated outdoor pool during the summer upon

payment of annual membership dues of $$175.$ The club has not issued any stock in years, and only a few

of the existing shares come up for sale each year. The board of directors administers the sale of all stock.

When a shareholder wants to sell, he or she turns the stock into the board, which sells it to the person at

the top of the waiting list. For the past few years, the length of the waiting list has remained relatively steady

at approximately $20$ names.

However, during the past winter two events occurred that have suddenly increased the demand for shares

in the club. The winter was especially severe, and subzero weather and heavy ice storms caused both the

town and the county pools to buckle and crack. The problems were not discovered until maintenance crews

began to prepare the pools for the summer, and repairs cannot be completed until the fall. Also during the

winter, the manager of the local country club had an argument with her board of directors and one night

burned down the clubhouse. Although the pool itself was not damaged, the dressing room facilities,

MGT $1220-$ Strategic Capacity Planning and Demand Management

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showers, and snack bar were destroyed. As a result of these two events, the Cascades Swim Club was

inundated with applications to purchase shares. The waiting list suddenly grew to $250$ people as the

summer approached.

The board of directors of the swim club had refrained from issuing new shares in the past because there

never was a very great demand, and the demand that did exist was usually absorbed within a year by stock

turnover. In addition, the board has a real concern about overcrowding. It seemed that the present

membership was about right, and there were very few complaints about overcrowding, except on holidays

such as Memorial Day and the Fourth of July. However, at a recent board meeting, a number of new

applicants attended and asked the board to issue new shares. In addition, a number of current shareholders

suggested that this might be an opportunity for the club to raise some capital for needed repairs and to

improve some of the existing facilities. This was tempting to the board. Although it had set the share price

at $$500$ in the past, the board could set it at a much higher level now. In addition, an increase in attendance

could create a need for more lifeguards.

Before the board of directors could make a decision on whether to sell more shares and, if so$,$ how many,

the board members felt they needed more information. Specifically, they would like a forecast of the average

number of people $($family members, guests, etc.$)$ who might attend the pool each day during the summer

with the current number of shares.

The board of directors has the following daily attendance records for June through August from the previous

summer; it thinks the figures would provide accurate estimates for the upcoming summer.