Cross Border Management

Forecasting Task

Cross Border Management
Windsor, Ontario. August 25, 2015 – Alicia Pomeroy studies Border Management and International Trade at University of Windsor Tuesday August 25, 2015. (NICK BRANCACCIO/The Windsor Star)

Suppose you are employed by a firm which is involved in Tourism. One idea that management currently have is to establish an all-day tour of Sydney which is primarily designed to highlight a unique Australian experience including a “backyard” barbeque where kangaroo and crocodile meats will be available, indigenous cultural displays and unique presentation of key points of Australian history at suitable locations near the City CBD. There is no comparable tour available in the Sydney market and the suggested price for adults (all inclusive) is $100, children $50 and family pass (2 adults and 2 children) for $200.

Management believes that approximately 6% of all tourists who come to Sydney (for tourism) will be interested in such a tour. (Assume any small variations in demand can be catered for without altering overheads). It is also believed demand from domestic tourists visiting Sydney will be negligible. A promotional campaign to maximize awareness of the tour among tourists is being planned for May-June in various overseas media, local outlets, and publications and with the first tours likely to start at the beginning of July 17 (provided the tour is forecast to achieve an adequate return). You have been asked as the senior forecasting analyst to predict the likely potential demand for each month from July 2017 – June 2018 and to provide a report to the likely viability of the tour. The tasks you are required to perform are indicated below;

Q.1 Provide revenue projections for the proposed all-day tour for the nominated 12 months (Jul-17- Jun 18). (You will need to think about the composition of demand in terms of adults, children, and families – provide some evidence to justify your assumed composition)

Q.2Indicate how current and possible future economic conditions may impact on the forecasts, revenues, and profits. If possible, provide adjusted forecasts, revenues, and profits.

David Marks

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