Case Problem 12.3
Cascades Swim Club
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, 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 had 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:
See attached file
What: Review the Case Problem and develop a forecasting model.
Hint: The final deliverable should be an Excel spreadsheet consisting of Days and Weeks.
his assignment is worth 60 points. Your paper needs to consist of two pages: 1. Cover page, 2. Forecasting model
