Harbor Dunes Golf Course was recently honored as one of the top public golf courses in South Carolina. The course is sit

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Harbor Dunes Golf Course was recently honored as one of the top
public golf courses in South Carolina. The course is situated on
land that was once a rice plantation, offers some of the best views
of saltwater marshes available in the Carolinas. Harbor Dunes
targets the upper end of the gold market and in the peak spring
golfing season, charges green fees of $160 per person and golf cart
fees of $20 per person. Harbor Dunes takes reservations for tee
times for groups of four players (foursomes) starting at 7:30 each
morning. Foursomes start at the same time on both the front nine
and the back nine of the course, with a new group teeing off every
nine minutes. The process continues with new foursomes starting
play on both the front and back nine at noon. To enable all prayers
to complete 18 holes before darkness, the last two afternoon
foursomes start their rounds at 1:21 p.m. Under this plan, Harbor
Dunes can sell a maximum of 20 afternoon tee times. Last year
Harbor Dunes was able to sell every morning tee time available for
every day of the spring golf season. The same result is anticipated
for the coming year. Afternoon tee times, however, are generally
more difficult to sell. An analysis of the sales data for last year
enable Harbor Dunes to develop the probability distribution of
sales for the afternoon tee times as shown in Table 16.12. For the
season, Harbor Dunes averaged selling approximately 14 of the 20
available afternoon tee times. The average income from afternoon
green fees and cart fees has been $10,240. However, the average of
six unused tee times per day resulted in lost revenue. In an effort
to increase the sale of afternoon tee times, Harbor Dunes is
considering an idea popular at other golf courses. These courses
offer foursomes that play in the morning the option to play another
round of golf in the afternoon by paying a reduced fee for the
afternoon round. Harbor Dunes is considering two replay options:
(1) a green fee of $25 per $20 per player plus a cart fee of $20
per player; (2) a green fee of $50 per player plus a cart fee of
$20 per player. For option 1, each foursome will generate
additional revenues of $180; for option 2, each foursome will
generate additional revenues of $280. The key in making a decision
as to what option is best depends upon the number of groups that
find the option attractive enough to take the replay offer. Working
with a consultant who has expertise in statistics and the golf
industry, Harbor Dunes developed probability distribution for the
number of foursomes requesting a replay for each of the two
options. These probability distributions are shown in Table 16.13.
In offering these replay options, Harbor Dunes� first priority will
be to sell full-price afternoon advance reservations. If the demand
for replay tee times exceeds the number of afternoon tee times
available, Harbor Dunes will post a notice that the course is full.
In this case, any excess replay requests will not be accepted.
TABLE 16.12 Probability distribution of sales for the afternoon
tee times
TABLE 16.13 Probability distribution for the number of groups
requesting a replay
(SHOW FORMULAS IN EXCEL to see how you got the
numbers)
Develop simulation models for both replay options using Crystal
Ball. . Prepare a report that will help the management of Harbor
Dunes, Golf Course decide which replay option to implement for the
upcoming spring golf season. In preparing your report, be sure to
include the following:
1. Create a simulation model of each of the Harbor Dune replay
options using excel. (show formulas not just numbers)
2. Make sure to add a statistical summary for each option.
3. Which option would you recommend to use going forward and
explain.
4. Besides extending the season do you see a modification to
operating procedures that might benefit the club.