Case: Forecasting

A Case Study
Presented to the Department of Industrial and Systems Engineering
De La Salle University-Manila
1st Term, A.Y. 2023-2024

In partial fulfillment
of the requirements for the course
Introduction to Operations Management for IE Majors (PROMGT1)

Esguerra, Julio Fernando G.

Gan, Jacob Y.
Ong, Journey C.
Zaragoza, Leigh Dominique C.
Section ER2

Ms. Samantha Cano

September 26, 2023
QUESTION:
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 Phil Flamm was hired as its head coach in
2009 (in hopes of reaching the elusive number 1 ranking), attendance at the five Saturday home
games each year increased. Prior to Flamm’s arrival, attendance generally averaged 25,000 to
29,000 per game. Season ticket sales bumped up by 10,000 just with 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 following table indicates
attendance at each game for the past 6 years. One of Flamm’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. Flamm 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 $50 in 2016 and a 5% increase each year in future prices.
 1. Develop a forecasting model, justifying its selection over other techniques, and project
attendance through 2017.

Southwestern University can utilize various forecasting techniques such as time-series

analysis as this approach would take the historical attendance data into account along with the
trend pattern over time. As such, the attendance data involves seasonal variations in data that is
applied to SWU’s five Saturday games on a yearly basis. There are 2 special cases: the first
case is that a homecoming game (every second game) leads to the highest attendance rate per
year whilst the second case is every 4th game is considered to have the lowest attendance rate
due to Stephenville’s popular southwestern crafts festival. Thus, in order to predict the
attendance rate and revenue for 2016 and 2017, the forecasting model should include trend and
seasonal indices.

Game 1 Game 2 Game 3 Game 4 Game 5

2010 34,200.00 39,800.00 38,200.00 26,900.00 35,100.00
2011 36,100.00 40,200.00 39,100.00 25,300.00 36,200.00
2012 35,900.00 46,500.00 43,100.00 27,900.00 39,200.00
2013 41,900.00 46,100.00 43,900.00 30,100.00 40,500.00
2014 42,500.00 48,200.00 44,200.00 33,900.00 47,800.00
2015 46,900.00 50,100.00 45,900.00 36,300.00 49,900.00
Total 237,500.00 270,900.00 254,400.00 180,400.00 248,700.00
Mean 39,583.33 45,150.00 42,400.00 30,066.67 41,450.00
OVERALL SEASONAL INDEX
Game 1 0.9963084151
Game 2 1.136420841
Game 3 1.067203624
Game 4 0.7567748972
Game 5 1.043292223

Trend Adjusted
Forecast (ROUND
Attendees per year Trend Forecast OFF)
1 2010 Game 1 34200 34080 33,954
2 Game 2 39800 34499 39,205
3 Game 3 38200 34918 37,265
4 Game 4 26900 35337 26,742
5 Game 5 35100 35756 37,304
6 2011 Game 1 36100 36175 36,041
7 Game 2 40200 36594 41,586
8 Game 3 39100 37013 39,500
9 Game 4 25300 37432 28,328
10 Game 5 36200 37851 39,490
11 2012 Game 1 35900 38270 38,129
12 Game 2 46500 38689 43,967
13 Game 3 43100 39108 41,736
14 Game 4 27900 39527 29,913
15 Game 5 39200 39946 41,675
16 2013 Game 1 41900 40365 40,216
17 Game 2 46100 40784 46,348
18 Game 3 43900 41203 43,972
19 Game 4 30100 41622 31,498
20 Game 5 40500 42041 43,861
21 2014 Game 1 42500 42460 42,303
22 Game 2 48200 42879 48,729
23 Game 3 44200 43298 46,208
24 Game 4 33900 43717 33,084
25 Game 5 47800 44136 46,047
 26 2015 Game 1 46900 44555 44,391
27 Game 2 50100 44974 51,109
28 Game 3 45900 45393 48,444
29 Game 4 36300 45812 34,669
30 Game 5 49900 46231 48,232

2. What revenues are to be expected in 2016 and 2017?

Based on the revenue projection and hypothetical trend adjusted forecast data, it is
assumed that the total revenue for 2016 is $11,866,015.04 and 2017 being $13,009,253.29.
This showcases that Southwestern University is in a good financial position.
TREND TAS FORECAST
FORECAST (ROUNDED OFF) REVENUE
2016 in Total
31 2016 Game 1 46650 46,478 $2,323,889.38 Revenue
32 Game 2 47069 53,490 $2,674,509.63 $11,866,015.04
33 Game 3 47488 50,679 $2,533,968.29
34 Game 4 47907 36,255 $1,812,740.75
35 Game 5 48326 50,418 $2,520,907.00
2017 in Total
36 2017 Game 1 48745 48,565 $2,549,665.32 Revenue
37 Game 2 49164 55,871 $2,933,227.20 $13,009,253.29
38 Game 3 49583 52,915 $2,778,045.76
39 Game 4 50002 37,840 $1,986,613.57
40 Game 5 50421 52,604 $2,761,701.45

3. Discuss the school’s options.

Southwestern University’s president, Dr. Joel Wisner, should keep in mind that there is a
possible outcome wherein the 2017’s Game 2 (Homecoming) would result in going over the
maximum capacity of SWU’s 54,000 seating stadium based on the Trend Adjusted Forecasting.
They have numerous opportunities for building a new stadium and satisfying Coach Phil
Flamm's requests, but if they don't move quickly, some of them will start to be constrained by
time limitations. The future game attendance projections must first be understood in order to
comprehend the school's alternatives. Additionally, they need to know how much money the
school anticipates making from ticket sales over the following two years. These attendance and
income projections show that SWU is in a great financial position, which means by the second
game of 2017, a new stadium should be constructed to avoid having to turn away attendees.