The owners of Mullins Court are considering alternatives in the renovation and utilization of this property.  While they own the building and have secured a line of credit for renovation, the original estimates that various contractors had given them are no longer valid.  For example, the price of copper and the availability of contractors have changed dramatically since Hurricane Katrina.  With the dynamic changes in the environment and unreliable estimates from contractors, the original plan to renovate the entire set of buildings all at once no longer seems possible.  Importantly, the lender is hesitant to release funds for work that is now in actuality substantially more costly than originally estimated when the line of credit was originally established.

Here's an example of the kind of issues that are being faced:  The original electrical contractor provided an estimate to wire the entire set of three buildings, and this was used in the original timeline to secure the line of credit.  When work was set to begin, however, the electrical contractor said that he had grossly under-estimated his costs to complete the project and then disappeared.  Another contractor was contacted and submitted an estimate for just one of the three buildings.  This estimate was for about half of the original estimate for the entire set of three buildings.  Once again, when this second contractor was asked to commit to a contract, he said that he had grossly underbid and disappeared.  A third contractor has submitted an estimate to wire one of the buildings, and this estimate is close to the original estimate that had been given to wire the entire set of three.  Although the owners of Mullins Court believe that the project is still feasible, the lender must be convinced that such substantial changes in costs are not fatal setbacks.

We cannot forecast demand for the various components of the product portfolio that might be associated with this property.  You are being asked to instead estimate the marketing feasibility of a portfolio that our client proposes to us during today's class visit.  The target audience of your report is our client. 

Total length of the report, exclusive of appendices, must be no more than five pages of text.  Appendices are to be used for charts, figures, tables, or calculations that would spoil the flow of the written report, but which are necessary to support or substantiate statements that are made in the report.  Do not include an appendix unless it is specifically referenced in the report; appendices that are not referenced will not be read. 

This report must use the following basic outline:

  I. Problem Statement

 II. Situation Analysis

III. Analysis of Alternatives
     A) breakeven using supplied information and assumptions
     B) breakeven using some reasonable set of assumptions
     C) however, breakeven using a better set of assumptions
     D) perhaps one more even better set of assumptions

 IV. Recommendation
 

This is a real world assignment.  The written report will be scored in large part on the professor's perception of the usefulness and acceptability of the report to the real client.  Note that a minimal requirement is that reports be relatively free of problems of grammar, spelling, typing, and such.  Do not fabricate material for the sake of creating a report.  Remember that this is not a creative writing assignment but is a technical writing assignment. 

Use the information that our client gives us in class, but you might also have to make assumptions about construction costs, operating costs, employee expenses, insurance, and such.  Be sure that your assumptions regarding costs and the marketing environment are clearly stated and substantiated. 

Some Important Rules:

Please take special precautions if you discuss this project with anyone outside of the class.  Information regarding this project that is distributed or discussed in class is confidential.  Equally important, we do not want anyone outside of the class to be misled by our activities.  We must be especially careful that anyone outside of our class understands that this is a learning exercise for the class and that the university otherwise has no association with the project or the client.  Please exercise restraint when expressing personal opinions about project issues outside of our class meetings.

For a variety of reasons, you are prohibited from conducting primary research excepting some kinds of observational research that would not reveal the nature of our project.  This has caused serious enough problems in the past that I will immediately drop you from the course if I have reason to suspect that you have interviewed or surveyed other similar organizations, business leaders, prospective customers, etc.  Engaging in these activities could, for example, jeopardize our relationships with other business school clients, could jeopardize relationships with college donors, and if running surveys, would jeopardize federal funding that our institution receives.

You are, however, expected to do outside secondary research for this project.  This could include, for example, finding demographic information that is related to estimating the size and location of potential target markets for this product or organization, finding information regarding industry trends, and such.  Keep copies of all information that you find because you will be required to cite all sources of information and to submit copies of all cited information with your report.