Question

The University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each corporate member of the center (there are currently 10) receives five free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium Registration processing Speaker costs Continental breakfast Lunch Parking $150 $8.50 per person (3 speakers $800 each) $4.00 per person $7.00 per person $5.00 per person a) Build a spreadsheet model that calculates a profit or loss based on the total number of 100 nonmember registrants. b) Use Goal Seek to find the number of nonmember registrants that will make the event break even. c) The Center for Business Analytics is considering a refund policy for no-shows. No refund would be given for members who do not attend, but nonmembers who do not attend will be refunded 50% of the price. Extend the model you developed in a) for the Business Intelligence Symposium to account for the fact that, historically, 25% of members who registered do not show and 10% of registered nonmembers do not attend. The center pays the caterer for breakfast and lunch based on the number of registrants (not the number of attendees). However, the center pays for parking only for those who attend. What is the profit if each corporate member registers their full allotment of tickets and 127 nonmembers register? d) Use a two-way data table to show how profit changes as a function of number of registered nonmembers and the no-show percentage of nonmembers. Vary the number of nonmember registrants from 80 to 160 in increments of 5 and the percentage of nonmember no-shows from 10 to 30% in increments of 2%.

please show the excel and work

Answer 1

Answer:

a)

Total variable costs for non members = registration processing+continental breakfast+lunch+parking

= 8.5+4+7+5 = $24.5 per person

Fixed costs = rental cost of the auditorium+speaker costs = 150+2400 = $2,550

No. of free seats = 10 members*5 = 50. This can also be considered as a fixed cost, assuming that for each symposium 50 persons come. Thus their costs = 50*24.5 = 1225. Total fixed costs = 2550+1225 = 3775

Net Profit = 2565

b)

Compute the number of non-member to break even in the following manner:

The total revenue will be generated form the nonmembers only.

Total cost woill be incurred on all members.

Total cost will be equal to the variable costs and fixed costs.

Breakeven = fixed costs/sales price per unit - variable costs per unit

3775/(75 - 24.5) = 74.75 registrants or 75 rounded off. This will cover only the costs of nonmembers as well as members.

Goal seek can be used in excel to find the above. Set the cell of revenue - total costs as nil. Then select the cell of no. of nonmember registrants to change and use goal seek function.

Use GOAL SEEK function to compute. Go to data >what if analysis > goal seek

Looks somewhat like:-

c)

profit = 1738.50 - Refund on 12.7 non member non-attendees

= 1738.50 - 12.7 (75*0.5) = 1262.25

d)

Revenue collected in the starting by the non members are 75*127 = 9525 and not 8572.5 ( which was calculated from 114.3*75) , which wont be refunded if they haven't given in the first place

so profit = 1262.25+(9525-8572.5) = 2214.75