COMPANY Case: Porsche: Guarding the Old While Bringing in the New

Porsche (pronounced Porsh-uh) is a unique company. It has always been a niche brand that makes cars for a small and distinctive segment of automobile buyers. In 2009, Porsche sold only 27,717 cars in the five models it sells in the United States. Honda sold about 10 times that many Accords alone. But Porsche owners are as rare as their vehicles. For that reason, top managers at Porsche spend a great deal of time thinking about customers. They want to know who their customers are, what they think, and how they feel. They want to know why they buy a Porsche rather then a Jaguar, a Ferrari, or a big Mercedes coupe. These are challenging questions to answer; even Porsche owners themselves don’t know exactly what motivates their buying. But given Porsche’s low volume and the increasingly fragmented auto market, it is imperative that management understands its customers and what gets their motors running.

Since its early days, Porsche has appealed to a very narrow segment of financially successful people. These are achievers who see themselves as entrepreneurial, even if they work for a corporation. They set very high goals for themselves and then work doggedly to meet them. And they expect no less from the clothes they wear, the restaurants they go to, or the cars they drive. These individuals see themselves not as a part of the regular world but as exceptions to it. They buy Porsches because the car mirrors their self-image; it stands for the things owners like to see in themselves and their lives.

Most of us buy what Porsche executives call utility vehicles. That is, we buy cars primarily to go to work, transport children, and run errands. Because we use our cars to accomplish these daily tasks, we base buying decisions on features such as price, size, fuel economy, and other practical considerations. But Porsche is more than a utility car. Its owners see it as a car to be enjoyed, not just used. Most Porsche buyers are not moved by information but by feelings. A Porsche is like a piece of clothing—something the owner “wears” and is seen in. They develop a personal relationship with their cars, one that has more to do with the way the car sounds, vibrates, and feels, rather than the how many cup holders it has or how much cargo it can hold in the trunk. They admire their Porsche because it is a competent performance machine without being flashy or phony.

People buy Porsches because they enjoy driving. If all they needed was something to get them from point A to point B, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not. One successful businesswoman and owner of a high-end Porsche said, “When I drive this car to the high school to pick up my daughter, I end up with five youngsters in the car. If I drive any other car, I can’t even find her; she doesn’t want to come home.”

For its first few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand’s son. Ferry created the Porsche 356 because no one else made a car like he wanted. But as the years rolled on, Porsche management became concerned with a significant issue: Were there enough Porsche buyers to keep the company afloat? Granted, the company never had illusions of churning out the numbers of a Chevrolet or a Toyota. But to fund innovation, even a niche manufacturer has to grow a little. And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them.

This led Porsche to extend its brand outside the box. In the early 1970s, Porsche introduced the 914, a square-ish, mid-engine, two-seater that was much cheaper than the 911. This meant that a different class of people could afford a Porsche. It was no surprise that the 914 became Porsche’s top selling model. By the late 1970s, Porsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had: an engine in the front. At less than $20,000, more than $10,000 less than the 911, the 924 and later 944 models were once again Porsche’s pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60,000 cars a year.

Although these cars were in many respects sales successes, the Porsche faithful cried foul. They considered these entry-level models to be cheap and underperforming. Most loyalists never really accepted these models as “real” Porsches. In fact, they were not at all happy that they had to share their brand with a customer who didn’t fit the Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on mass over class marketing. This tarnished image was compounded by the fact that Nissan, Toyota, BMW, and other car manufacturers had ramped up high-end sports car offerings, creating some fierce competition. In fact, both the Datsun 280-ZX and the Toyota Supra were not only cheaper than Porsche’s 944 but also faster. A struggling economy threw more sand in Porsche’s tank. By 1990, Porsche sales had plummeted, and the company flirted with bankruptcy.

But Porsche wasn’t going down without a fight. It quickly recognized the error of its ways and halted production of the entry-level models. It rebuilt its damaged image by revamping its higher-end model lines with more race-bred technology. In an effort to regain rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales goals and decided that moderate growth with higher margins would be more profitable in the long term. Thus, the company set out to make one less Porsche than the public demanded. According to one executive, “We’re not looking for volume; we’re searching for exclusivity.”

Porsche’s efforts had the desired effect. By the late 1990s, the brand was once again favored by the same type of achiever who had so deeply loved the car for decades. The cars were once again exclusive. And the company was once again profitable. But by the early 2000s, Porsche management was again asking itself a familiar question: To have a sustainable future, could Porsche rely on only the Porsche faithful? According to then CEO Wendelin Wiedeking, “For Porsche to remain independent, it can’t be dependent on the most fickle segment in the market. We don’t want to become just a marketing department of some giant. We have to make sure we’re profitable enough to pay for future development ourselves.”

So in 2002, Porsche did the unthinkable. It became one of the last car companies to jump into the insatiable sport utility vehicle (SUV) market. At roughly 5,000 pounds, the new Porsche Cayenne was heavier than anything that Porsche had ever made, with the exception of some prototype tanks it made during WWII. Once again, the new model featured an engine up front. And it was the first Porsche to ever be equipped with seatbelts for five. As news spread about the car’s development, howls could be heard from Porsche’s customer base.

But this time, Porsche did not seem too concerned that the loyalists would be put off. Could it be that the company had already forgotten what happened the last time it deviated from the mold? After driving one of the first Cayenne’s off the assembly line, one journalist stated, “A day at the wheel of the 444 horsepower Cayenne Turbo leaves two overwhelming impressions. First, the Cayenne doesn’t behave or feel like an SUV, and second, it drives like a Porsche.” This was no entry-level car. Porsche had created a two-and-a-half ton beast that could accelerate to 60 miles per hour in just over five seconds, corner like it was on rails, and hit 165 miles per hour, all while coddling five adults in sumptuous leather seats with almost no wind noise from the outside world. On top of that, it could keep up with a Land Rover when the pavement ended. Indeed, Porsche had created the Porsche of SUVs.

Last year, Porsche upped the ante one more time. It unveiled another large vehicle. But this time, it was a low-slung, five-door luxury sedan. The Porsche faithful and the automotive press again gasped in disbelief. But by the time the Panamera hit the pavement, Porsche had proven once again that Porsche customers could have their cake and eat it to. The Panamera is almost as big as the Cayenne but can move four adults down the road at speeds of up to 188 miles per hour and accelerate from a standstill to 60 miles per hour in four seconds flat.

Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doors, Porsche insists that two trends will sustain these new models. First, a category of Porsche buyers has moved into life stages that have them facing inescapable needs; they need to haul more people and stuff. This not only applies to certain regular Porsche buyers, but Porsche is again seeing buyers enter its dealerships that otherwise wouldn’t have. Only this time, the price points of the new vehicles are drawing only the well heeled, allowing Porsche to maintain its exclusivity. These buyers also seem to fit the achiever profile of regular Porsche buyers.

The second trend is the growth of emerging economies. Whereas the United States has long been the world’s biggest consumer of Porsches, the company expects China to become its biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche’s worldwide sales. Now, it accounts for only about 26 percent. In China, many people who can afford to buy a car as expensive as a Porsche also hire a chauffeur. The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary.

The most recent economic downturn has brought down the sales of just about every maker of premium automobiles. When times are tough, buying a car like a Porsche is the ultimate deferrable purchase. But as this downturn turns back up, Porsche is better poised than it has ever been to meet the needs of its customer base. It is also in better shape than ever to maintain its brand image with the Porsche faithful and with others as well. Sure, understanding Porsche buyers is still a difficult task. But a former CEO of Porsche summed it up this way: “If you really want to understand our customers, you have to understand the phrase, ‘If I were going to be a car, I’d be a Porsche.’

4 Questions – Answer all Total Marks: 25

1.   Critically analyze the relevant Porters generic strategies and the growth strategies Porsche is pursuing , justify your answer by referring to the case study (5 marks)

2. Marketing had evolved through five stages, out of this five which concept or concepts is Porsche following , justify your answer. Do you agree with this why or why not (5 marks)

3. You are asked to develop a Mission statement and four Marketing objectives for Porsche for the next ten years (2021- 2025) . Draft an ideal mission statement and outline your four marketing objectives (5 marks

4. Identify , explain and justify the main consumer behaviour characteristics that influences the Porche buyers.

COMPANY Case: Porsche: Guarding the Old While Bringing in the New

Porsche (pronounced Porsh-uh) is a unique company. It has always been a niche brand that makes cars for a small and distinctive segment of automobile buyers. In 2009, Porsche sold only 27,717 cars in the five models it sells in the United States. Honda sold about 10 times that many Accords alone. But Porsche owners are as rare as their vehicles. For that reason, top managers at Porsche spend a great deal of time thinking about customers. They want to know who their customers are, what they think, and how they feel. They want to know why they buy a Porsche rather then a Jaguar, a Ferrari, or a big Mercedes coupe. These are challenging questions to answer; even Porsche owners themselves don’t know exactly what motivates their buying. But given Porsche’s low volume and the increasingly fragmented auto market, it is imperative that management understands its customers and what gets their motors running.

Since its early days, Porsche has appealed to a very narrow segment of financially successful people. These are achievers who see themselves as entrepreneurial, even if they work for a corporation. They set very high goals for themselves and then work doggedly to meet them. And they expect no less from the clothes they wear, the restaurants they go to, or the cars they drive. These individuals see themselves not as a part of the regular world but as exceptions to it. They buy Porsches because the car mirrors their self-image; it stands for the things owners like to see in themselves and their lives.

Most of us buy what Porsche executives call utility vehicles. That is, we buy cars primarily to go to work, transport children, and run errands. Because we use our cars to accomplish these daily tasks, we base buying decisions on features such as price, size, fuel economy, and other practical considerations. But Porsche is more than a utility car. Its owners see it as a car to be enjoyed, not just used. Most Porsche buyers are not moved by information but by feelings. A Porsche is like a piece of clothing—something the owner “wears” and is seen in. They develop a personal relationship with their cars, one that has more to do with the way the car sounds, vibrates, and feels, rather than the how many cup holders it has or how much cargo it can hold in the trunk. They admire their Porsche because it is a competent performance machine without being flashy or phony.

People buy Porsches because they enjoy driving. If all they needed was something to get them from point A to point B, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not. One successful businesswoman and owner of a high-end Porsche said, “When I drive this car to the high school to pick up my daughter, I end up with five youngsters in the car. If I drive any other car, I can’t even find her; she doesn’t want to come home.”

For its first few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand’s son. Ferry created the Porsche 356 because no one else made a car like he wanted. But as the years rolled on, Porsche management became concerned with a significant issue: Were there enough Porsche buyers to keep the company afloat? Granted, the company never had illusions of churning out the numbers of a Chevrolet or a Toyota. But to fund innovation, even a niche manufacturer has to grow a little. And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them.

This led Porsche to extend its brand outside the box. In the early 1970s, Porsche introduced the 914, a square-ish, mid-engine, two-seater that was much cheaper than the 911. This meant that a different class of people could afford a Porsche. It was no surprise that the 914 became Porsche’s top selling model. By the late 1970s, Porsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had: an engine in the front. At less than $20,000, more than $10,000 less than the 911, the 924 and later 944 models were once again Porsche’s pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60,000 cars a year.

Although these cars were in many respects sales successes, the Porsche faithful cried foul. They considered these entry-level models to be cheap and underperforming. Most loyalists never really accepted these models as “real” Porsches. In fact, they were not at all happy that they had to share their brand with a customer who didn’t fit the Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on mass over class marketing. This tarnished image was compounded by the fact that Nissan, Toyota, BMW, and other car manufacturers had ramped up high-end sports car offerings, creating some fierce competition. In fact, both the Datsun 280-ZX and the Toyota Supra were not only cheaper than Porsche’s 944 but also faster. A struggling economy threw more sand in Porsche’s tank. By 1990, Porsche sales had plummeted, and the company flirted with bankruptcy.

But Porsche wasn’t going down without a fight. It quickly recognized the error of its ways and halted production of the entry-level models. It rebuilt its damaged image by revamping its higher-end model lines with more race-bred technology. In an effort to regain rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales goals and decided that moderate growth with higher margins would be more profitable in the long term. Thus, the company set out to make one less Porsche than the public demanded. According to one executive, “We’re not looking for volume; we’re searching for exclusivity.”

Porsche’s efforts had the desired effect. By the late 1990s, the brand was once again favored by the same type of achiever who had so deeply loved the car for decades. The cars were once again exclusive. And the company was once again profitable. But by the early 2000s, Porsche management was again asking itself a familiar question: To have a sustainable future, could Porsche rely on only the Porsche faithful? According to then CEO Wendelin Wiedeking, “For Porsche to remain independent, it can’t be dependent on the most fickle segment in the market. We don’t want to become just a marketing department of some giant. We have to make sure we’re profitable enough to pay for future development ourselves.”

So in 2002, Porsche did the unthinkable. It became one of the last car companies to jump into the insatiable sport utility vehicle (SUV) market. At roughly 5,000 pounds, the new Porsche Cayenne was heavier than anything that Porsche had ever made, with the exception of some prototype tanks it made during WWII. Once again, the new model featured an engine up front. And it was the first Porsche to ever be equipped with seatbelts for five. As news spread about the car’s development, howls could be heard from Porsche’s customer base.

But this time, Porsche did not seem too concerned that the loyalists would be put off. Could it be that the company had already forgotten what happened the last time it deviated from the mold? After driving one of the first Cayenne’s off the assembly line, one journalist stated, “A day at the wheel of the 444 horsepower Cayenne Turbo leaves two overwhelming impressions. First, the Cayenne doesn’t behave or feel like an SUV, and second, it drives like a Porsche.” This was no entry-level car. Porsche had created a two-and-a-half ton beast that could accelerate to 60 miles per hour in just over five seconds, corner like it was on rails, and hit 165 miles per hour, all while coddling five adults in sumptuous leather seats with almost no wind noise from the outside world. On top of that, it could keep up with a Land Rover when the pavement ended. Indeed, Porsche had created the Porsche of SUVs.

Last year, Porsche upped the ante one more time. It unveiled another large vehicle. But this time, it was a low-slung, five-door luxury sedan. The Porsche faithful and the automotive press again gasped in disbelief. But by the time the Panamera hit the pavement, Porsche had proven once again that Porsche customers could have their cake and eat it to. The Panamera is almost as big as the Cayenne but can move four adults down the road at speeds of up to 188 miles per hour and accelerate from a standstill to 60 miles per hour in four seconds flat.

Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doors, Porsche insists that two trends will sustain these new models. First, a category of Porsche buyers has moved into life stages that have them facing inescapable needs; they need to haul more people and stuff. This not only applies to certain regular Porsche buyers, but Porsche is again seeing buyers enter its dealerships that otherwise wouldn’t have. Only this time, the price points of the new vehicles are drawing only the well heeled, allowing Porsche to maintain its exclusivity. These buyers also seem to fit the achiever profile of regular Porsche buyers.

The second trend is the growth of emerging economies. Whereas the United States has long been the world’s biggest consumer of Porsches, the company expects China to become its biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche’s worldwide sales. Now, it accounts for only about 26 percent. In China, many people who can afford to buy a car as expensive as a Porsche also hire a chauffeur. The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary.

The most recent economic downturn has brought down the sales of just about every maker of premium automobiles. When times are tough, buying a car like a Porsche is the ultimate deferrable purchase. But as this downturn turns back up, Porsche is better poised than it has ever been to meet the needs of its customer base. It is also in better shape than ever to maintain its brand image with the Porsche faithful and with others as well. Sure, understanding Porsche buyers is still a difficult task. But a former CEO of Porsche summed it up this way: “If you really want to understand our customers, you have to understand the phrase, ‘If I were going to be a car, I’d be a Porsche.’

.

4 Questions – Answer all Total Marks: 25

1.   Critically analyze the relevant Porters generic strategies and the growth strategies Porsche is pursuing , justify your answer by referring to the case study (5 marks)

2. Marketing had evolved through five stages, out of this five which concept or concepts is Porsche following , justify your answer. Do you agree with this why or why not (5 marks)

3. You are asked to develop a Mission statement and four Marketing objectives for Porsche for the next ten years (2021- 2025) . Draft an ideal mission statement and outline your four marketing objectives (5 marks

4. Identify , explain and justify the main consumer behaviour characteristics that influences the Porche buyers.

1. An experiment consists of drawing two marbles from a box containing red, yellow, and green marbles. One event in the sample space is RR. What are all of the events in the sample space? (Note: order matters) (3)

2. In a certain large population, 46% of households have a total annual income of over $70,000. A simple random sample is taken of four of these households. What is the probability that more than 2 of the households in the survey have an annual income of over $70,000?                                                                (8)

3. Which would you expect to have a higher standard deviation: data scores that are spread out or data scores that are close together?   
4. In a survey of U.S. households, 588 had home computers while 722 did not. Use this sample to estimate the probability of a household having a home computer.

1. Home Security Systems is studying the time utilization of its sales force. A random sample of 40 sales calls showed that the representatives spend an average of ẍ = 44 minutes on the road with a standard deviation of s = 6 minutes for each sales call.

1. Create a line showing the mean and values for 4 standard deviations above and 4 standard deviations below the mean.                                                                                                                                                (2)

2. Use Chebyshev’s Theorem to find the values between which we can expect at least 89% of the data to fall.                                                                                                                                                                       (2)

3. At least what percent of the data can we expect to fall between 38 and 50 minutes using the Empirical Rule?                                                                                                                                                        (2)

A psychologist studied the number of puzzles subjects were able to solve in a five-minute period while listening to soothing music. Let X be the number of puzzles completed successfully by a subject. The psychologist found that X had a distribution where the possible values of X are 1, 2, 3, 4 with the corresponding probabilities of 0.2, 0.4, 0.3, and 0.1. Use this information to answer questions 20-23 below.

2. Does the above data form a probability distribution? Create the distribution and explain why or why not.(5)

3. Using the above data, what is the probability that a randomly chosen subject completes at least three puzzles in the five-minute period while listening to soothing music?                                                                   (2)

4. Using the above data, the mean µ of X is what? Show work.                                                                             (3)
5. Using the above data (on previous page), the standard deviation σ of X is what? Show work.                      (4)

1. Why would we use the 10-90 percentile range?                                                                                                  +2

2. A data set has a range of 348. Use the range rule of thumb to determine the standard deviation.        +1

A batch of 26 light bulbs includes 5 that are defective. Two light bulbs are randomly selected. If the random variable, X, represents the number of defective light bulbs which can be selected, what values can X have?                

Cash Dividends, Stock Dividend, and Stock Split

During the year ended December 31, 20--, Choi Company completed the following transactions:

Required:

Prepare journal entries for the transactions. If an amount box does not require an entry, leave it blank.

Board of directors of Choi Company declared a two-for-one common stock split.

How is this transaction recorded in the books of Choi Compnay?

1. Suppose that the model of the economy is given by

Y = C + I + G + X

C = a + b Yd

Yd = (1 – t)Y

X = g – mY

a. Derive the equilibrium GDP (Y) and the expenditure multiplier (Me ) expressed in general notations.

b. Suppose I = $900 billion, G = $1,200 billion, a = 220, b = 0.9, t = 0.3, g = 500, and m = 0.1. Solve for the equilibrium GDP (Y) and the expenditure multiplier (Me ) using your answers to part a.

c. Is the expenditure multiplier (Me ) with variable import spending (refer the numerical solution of Me from part b) larger or smaller than the expenditure multiplier (Me ) with fixed import spending? In addition to an algebra comparison, provide an intuition with your answer. Hint: The expenditure multiplier (Me ) with fixed import spending (i.e. constant X)) is 1 1−?(1−?) , in the problem, b = 0.9, t = 0.3.

d. Solve for private saving (Sp), government saving (Sg), and the rest of the world saving (Sr) when investment spending (I) is $900 billion.

2. Consider following simple closed economy (X = 0) and all taxes are fixed (a constant T):

Y = C + I + G

C = a + b Yd

Yd = Y – T

a. Derive the equilibrium GDP (Y), the expenditure multiplier (Me ), and the fixed tax multiplier (MT ) expressed in general notation.

b. Suppose government changes government spending G and fixed taxes T by the same amount (G = T). Derive the balanced budget multiplier, Y/G with G = T, using solutions of Me and MT from part a. [Hint] Y = meG + mTT

c. Illustrate the effect on income Y of a balanced budget increase in government spending and taxes (i.e., G=T>0) on the income expenditure (45 degree) diagram. Fully label your diagram.

GoodNight Inn case study

Anton Cahoon is trying to decide whether he should make some minor changes in the way he operates his GoodNight Inn motel or if he should join either the Days Inn or Holiday Inn motel chains. Some decision must be made soon because his present operation is losing money. But joining either of the chains will require fairly substantial changes, including new capital investment if he goes with Holiday Inn.

Anton bought the recently completed 60-room motel two years ago after leaving a successful career as a production manager for a large producer of industrial machinery. He was looking for an interesting opportunity that would be less demanding than the production manager job. The GoodNight Inn is located at the edge of a very small town near a rapidly expanding resort area and about one-half mile off an inter- state highway. It is 10 miles from the tourist area, with several nationally franchised full-service resort motels suitable "destination" vacations. There is a Best Western, a Ramada Inn, and a Hilton Inn, as well as many mom-and-pop and limited-service, lower-priced motels-and some quaint bed- and-breakfast facilities-in the tourist area. The interstate highway near the GoodNight Inn carries a great deal of traffic, since the resort area is between several major metropolitan areas. No development has taken place around the turnoff from the interstate highway. The only promotion for the tourist area along the interstate highway is two large signs near the turnoffs. They show the popular name for the area and that the area is only 10 miles to the west. These signs are maintained by the tourist area's Tourist Bureau. In addition, the state transportation department maintains several small signs showing (by symbols) that near this turnoff one can find gas, food, and lodging. Anton does not have any signs advertising GoodNight Inn except the two on his property. He has been relying on people finding his motel as they go toward the resort area.

Initially, Anton was very pleased with his purchase. He had traveled a lot himself and stayed in many different hotels and motels-so he had some definite ideas about what travelers wanted. He felt that a relatively plain but modern room with a comfortable bed, standard bath facilities, and free cable TV would appeal to most customers. Further, Anton thought a swimming pool or any other non revenue producing additions were not necessary. And he felt a restaurant would be a greater management problem than the benefits it would offer. However, after many customers commented about the lack of convenient breakfast facilities, Anton served a free continental breakfast of coffee, juice, and rolls in a room next to the registration desk.

Day-to-day operations went fairly smoothly in the first two years, in part because Anton and his wife handled registration and office duties as well as general management. During the first year of operation, occupancy began to stabilize around 55 percent of capacity. But according to industry figures, this was far below the average of 68% for this classification motels without restaurants.

After two years of operation, Anton was concerned because his occupancy rates continued to be below average. He service resort motels. He stressed a price appeal in his signs and brochures and was quite proud of the fact that he had been able to avoid all the "unnecessary expenses" of the fulling at a very modest price-about 40 percent below the area motels. The customers who stayed at GoodNight Inn said large number of people driving into his parking lot, looking study by the regional tourist bureau. This study revealed the rooms more than 60 days in advance. motels were being planned for the area. After some investigat though they each have about 2,000 units nationwide. economy lodgings. It has been growing rapidly and is willing was far below the average of 68 percent for his classification- motels without restaurants. After two years of operation, Anton was concemed be- 655 decided to look for ways to increase both occupancy rate and profitability and still maintain his independence. Anton wanted to avoid direct competition with the full- service resort motels. As a result, Anton was able to offer lodg- full-service hotels and comparable to the lowest-priced resort they found it quite acceptable. The hotels online reviews at sites like TripAdvisor, while not numerous, were generally pretty positive. But he was troubled by what seemed to be a around, and not coming in to register. Anton was particularly interested in the results of a recent following information about area vacationers: 1. 68 percent of the visitors to the area are young couples and older couples without children. 2. 40 percent of the visitors plan their vacations and reserve 3. 66 percent of the visitors stay more than three days in the area and at the same location. 4. 78 percent of the visitors indicated that recreational facili- ties were important in their choice of accommodations 5. 13 percent of the visitors had family incomes of less than $27,000 per year. 6. 38 percent of the visitors indicated that it was their first visit to the area. After much thought, Anton began to seriously consider affiliating with a national motel chain in hopes of attracting more customers and maybe protecting his motel from the in- creasing competition. There were constant rumors that more ing, he focused on two national chain posibilities: Days Inn and Holiday Inn. Neither had affiliates in the area even Days Inn of America, Inc., is an Atlanta-based chain of to take on new franchisees. A major advantage of Days Inn is that it would not require a major capital investment by An- ton. The firm is targeting people interested in lower-priced motels, in particular, senior citizens, the military, school sports teams, educators, and business travelers. In contrast, Holiday Inn would probably require Anton to upgrade some of his facilities, including adding a swimming pool. The total new capital investment would be between $300,000 and $500,000, depending on how fancy he got. But then Anton would be able to charge higher prices, perhaps $75 per day on the aver- age rather than the $45 per day per room he's charging now. The major advantages of going with either of these na- tional chains would be their central reservation systems and their national names. Both companies offer nationwide, toll- free reservation lines, which produce about 40 percent of all bookings in affiliated motels. Both companies also offer Web sites (www.daysinn.com and www.holiday-inn.com) that help find a specific hotel by destination, rate, amenities, quality rating, and availability. A major difference between the two national chains-is their method of promotion. Days Inn uses little TV advertis- ing and less print advertising than Holiday Inn. Instead, Days Inn emphasizes sales promotions. In one campaign, for exam- ple, Blue Bonnet margarine users could exchange proof-of- purchase seals for a free night at a Days Inn. This tie-in led to the Days Inn system selling an additional 10,000 rooms. tain their facilities and make repairs and improvements as Further, Days Inn operates a September Days Club for travel- ers 50 and over who receive such benefits as discount rates and a quarterly travel magazine. Days Inn also has other membership programs, including its InnCentives loyalty club for frequent business and leisure travelers. Other programs targeted to business travelers in- clude two Corporate Rate programs and its new Days Business Place hotels. Not to be outdone, Holiday Inn has a member- ship program called Priority Club Worldwide. Both firms charge 8 percent of gross room revenues for belonging to their chain-to cover the costs of the reservation service and national promotion. This amount is payable monthly. In addition, franchise members must agree to main- required. Failure to maintain facilities can result in losing the franchise. Periodic inspections are conducted as part of super- vising the whole chain and helping the members operate more effectively. Evalaate Anton Cahoon's present strategy. What should he do? Explain.

Java Programming Project 6: File I/O

Purpose: To practice reading from as well as writing to text files with the help of Scanner class methods, and PrintStream class methods. You will also learn to implement some simple Exception Handling.

Carefully examine and follow ALL the program specifications.

Take a look at the PPT slides for Chapter 7 File I/O for examples that will help with this program.

Hotel Expense Recording Keeping:

A hotel bookkeeper enters client hotel expenses in a text file. Each line contains the following, separated by semicolons: client name, service sold (i.e., Dinner, Conference, Lodging, etc.), the sales amount, and the date.

1. Your program should first query the user for the name of the input file and read it in. Display an error if the input file is not found (does not exist).
2. Then the program should read the file (line by line), keep a running tally of the total amount for each kind of service,
3. Finally display the total amount for each service category. In addition to displaying totals on the screen, the totals should also be written to an output file.
4. Additionally your program should include some exception handling. An Exception that should be checked (and handled) would be a FileNotFoundException.

Attached (and below) is an example input file that your program will be tested with, so you will need to make sure that you program will run correctly using this file. Since this may be your first experience reading from an input file, you will likely find it easiest if you store the input file in the same folder with your Java program file so that they can easily communicate with one another. The easiest way to store this file is as a plain text file in Notepad (do not use MS word or any other sophisticated word processor or you will be processing embedded text commands, which is not at all recommended). Here is what the input file looks like:

Jason Inouye;Conference;250.00;11/10/2016

Jason Inouye;Lodging;78.95;11/10/2016

Mary Ryan;Dinner;16.95;11/10/2016

Mark Twain;Dinner;25.50;11/10/2016

Mark Twain;Spa;50.00;11/10/2016

Steven Hawking;Conference;250.00;11/10/2016

Steven Hawking;Room Service;45.00;11/11/2016

Steven Hawking;Lodging;78.95;11/11/2016

Ayrton Senna;Room Service;23.20;11/10/2016

Ayton Senna;Dinner;22.50;11/10/2016

Ayton Senna;Lodging;78.95;11/10/2016

One feature of the input file, is that it uses a semicolon (;) to delimit the tokens on each line of input, rather than whitespace. You will need to use a delimiter statement after you construct your line scanner object.

To see how to construct a line scanner object, go to Chapter 7 PowerPoint slide in the Week 13 folder. So for example, if you create an object called lineScan of type Scanner to process tokens on a given line of input, then you could call the useDelimiter method on your lineScan object, as follows:

lineScan.useDelimiter(";");

This will allow you to tokenize each input line based, not on white space delimiters, but using the semicolon as a delimiter instead.

This is what should be in your Output file after you run your program (this file will most likely be located in the same folder as your Java program).

Dinner expenses : 64.95
Lodging expenses : 236.85
Conference expenses : 500.00
Room Service expenses : 68.20
Spa expenses : 50.00

Submission Requirements:

1. Please be sure to use appropriate prologue comments at the top of your program, Javadoc formatted comments for your methods, as well as inline comments within the body of your code (as needed).

Problem 3. Carleton agency, a VHWO, conducts two programs: medical services and community information services. It had the following transactions during the year ended June 30, 2016:

1. Received the following contributions:

2. Collected the following pledges:

3. Received the following unrestricted cash flows from:

4. Program expenses incurred (processed through vouchers payable):

5. Services expenses incurred (processed through vouchers payable):

6. Purchased fixed assets:

Fixed assets purchased with donor-restricted cash $18,000.

Carleton's policy is to release donor restrictions when assets are placed in service.

7. Depreciation of all buildings and equipment in the land, buildings, and equipment fund was allocated as follows:

8. Vouchers paid: Paid vouchers payable $330,000

Instructions Record journal entries for the preceding transactions. Number your journal entries to coincide with the preceding transaction numbers. (AICPA adapted)

Fixed Asset Discussion:

1. Identify a type of company in your pathway that might purchase fixed assets (see suggestions below).
2. List 5 fixed assets that they might purchase to run their business.
3. Select one depreciable fixed asset. Based on research suggest what the cost, residual value and estimated life might be for that fixed asset.
4. Using your assumptions above, calculate:
   1. Straight-line depreciation per year.
   2. Declining Balance depreciation for each of the first two years
   3. Units of Production depreciation (make assumptions about the total expected use and the first two year’s use), for each of the first two years.
5. Suggest which depreciation method might be more appropriate and why.

Examples of sectors/industries in pathways could be:

• AHCD: Media, Dance, Theater, Film production, Graphics design or Architecture
• Business: Tourism/Leisure, Telecommunications, Retailers, Computers, Equipment, Food and Beverage Products, Real Estate, Technology Hardware, Toys, Commercial Services, Financial Services, any business is acceptable
• Education: Non-Profit Services, Public Agency, Child care, Charter schools, Universities
• Health Sciences: Health Care Services, Healthcare Products, Hospital, Household Products, Chemicals
• IMCT: Aviation, Construction, Construction Materials, Logistics, Automotive, Mining
• Public Safety:   Equipment providers for the industry, Public Agency, Non-Profit Services
• STEM: Engineering, Computers. Chemicals, Energy, Energy Utilities, Technology Hardware
• SGSHS: Healthcare Services, Non-Profit Services, Media, Public Agency

A random sample of fifty si ​200-meter swims has a mean time of 3.06 minutes and the population standard deviation is 0.08 minutes. Construct a 95​% confidence interval for the population mean time. Interpret the results.In a random sample of 50 ​refrigerators, the mean repair cost was $136.00 and the population standard deviation is​$19.1019.10. A 90​% confidence interval for the population mean repair cost is (131.56,140.44). Change the sample size to n=100. Construct a 90% confidence interval for the population mean repair cost. Which confidence interval is​ wider? Explain.

Construct a 90% confidence interval for the population mean repair cost.

The 95​% confidence interval isA random sample of thirty-seven ​200-meter swims has a mean time of 3.591 minutes. The population standard deviation is 0.080 minutes. A 90​% confidence interval for the population mean time is (3.569,3.613). Construct a 90​% confidence interval for the population mean time using a population standard deviation of 0.03 minutes. Which confidence interval is​ wider? Explain.

The 90​% confidence interval is

The 95​% confidence interval is

You are given the sample mean and the population standard deviation. Use this information to construct the​ 90% and​ 95% confidence intervals for the population mean. Interpret the results and compare the widths of the confidence intervals. If​ convenient, use technology to construct the confidence intervals.

A random sample of 35 home theater systems has a mean price of ​$128.00. Assume the population standard deviation is ​$15.90. Find the 90% and 95% of confidence interval.