would an atm machine on cmc’s campus be profitable? joseph chang maryan samson andrew yeh

Would an ATM machine on CMC’s campus be profitable?

Joseph Chang Maryan Samson Andrew Yeh

The case against an ATM machine on CMC:

-ATM machines at Pomona and Huntley Bookstore do NOT have high volume of activity

-Banks speculate that an ATM machine on CMC would be not generate more activity than Pomona or Huntley have thus far

-Fundamental part of any deal would necessitate CMC advertising on behalf of Bank’s ATM on-campus to all incoming Freshman classes

The case for an ATM machine on CMC:

-Pomona has one

-Northern part of CMC is a central point of the rest of the Consortium

-Major implication: in addition to CMC students that would use an ATM machine on CMC’s campus—students across Pitzer, Scripps, Harvey Mudd would change their preference to an ATM machine on CMC

-Planned growth for Pitzer and CMC campus actually imply higher future potential customers

Data Collection

Sample Size: 202 Students (124 Non-CMC, 88 CMC)

Online SurveyHand Surveys

The Empirical CaseAssertion: CMC’s ATM machine would not generate $50,000 of monthly activity

Data as of May 4, 2009:

-Claremont McKenna student body: 1,211 students x (On-campus housing rate): 97%- (CMC student abroad average): 73 students

-CMC active student body: 1,102 students

-Pitzer student body: 950 students x (On-campus housing rate): 94%- (Pitzer student abroad average): 75 students

- active student body : 818 students

-Scripps student body: 962 students x (On-campus housing rate): 96%- (Scripps student abroad average): 65 students

-Scripps active student body : 859 students

The Empirical Case cont.

Summary of Findings:Of the 89 CMC students polled, 83 students said they would use an ATM machine on CMC’s campus

-Average Gross Transactions: 93.92771-Average Monthly Frequency: 2.792683-Average Monthly Gross Transactions: $262.92 -Variance of Gross Transactions: 7084.995-Standard Deviation of Gross Transactions: 84.17241-Variance of Monthly Frequency: 3.252785-Standard Deviation of Monthly Frequency: 1.803548

-Based on Sample size of 83/89 = 93% of CMC students would use an ATM machine on CMC’s campus

The Empirical Case cont.

Summary of Findings:Of the 63 Pitzer students polled, 53 students said they would use an ATM machine on CMC’s campus

-Average Gross Transactions: 54.1504-Average Monthly Frequency: 2.653846-Average Monthly Gross Transactions: $143.72-Variance of Gross Transactions: 2463.208-Standard Deviation of Gross Transactions: 49.63081-Variance of Monthly Frequency: 2.653846-Standard Deviation of Monthly Frequency: 1.956259

-Based on Sample size of 53/63 = 84% of Pitzer students would use an ATM machine on CMC’s campus

The Empirical Case cont.

Summary of Findings:Of the 49 Scripps students polled, 36 students said they would use an ATM machine on CMC’s campus

-Average Gross Transactions: 61.80556-Average Monthly Frequency: 2.882353-Average Monthly Gross Transactions: $177.98-Variance of Gross Transactions: 1974.504-Standard Deviation of Gross Transactions: 44.43539-Variance of Monthly Frequency: 12.71301-Standard Deviation of Monthly Frequency: 3.565531

-Based on Sample size of 36/49 = 73% of Scripps students would use an ATM machine on CMC’s campus

The Empirical Case conclusion.

Based on our sample sizes,

CMC would have 93% of their active study body using the ATM Machine. 93% of 1,102 would yield 1025 students with an average monthly transaction of $262.92. Net activity: $269,493.00

Pitzer would have 84% of their active study body using the ATM Machine. 84% of 818 would yield 687 students with an average monthly transaction of $177.98 Net activity: $122,272.26

Scripps would have 73% of their active study body using the ATM Machine. 73% of 859 would yield 627 students with an average monthly transaction of 117.98. Net activity: $111.595.97

The sum clearly exceeds the $50,000 target by Wells Fargo.

Limitations of research:

-Activity during summer breaks and winter breaks significantly lower-Cannot calculate costs of advertising plan-Surveys approximate transactions—possible inflation-Does not take into account actual logistics of a proposed ATM machine i.e. location, hours, bank, etc.-Does not fully address the behavior—just the numerical data

Research: To identify what factors affect the students of CMC, Pitzer, and Scripps when choosing an ATM machine

Hypotheses:- DISTANCE (+)- SCHOOL (+)- GROSS TRANSACTION (+)- FREQUENCY (+)- EMPLOYED (+)- LOCATION (+)

Regression StatisticsMultiple R 0.385849R Square 0.14888

Adjusted R Square 0.122691

Standard Error 0.333908Observations 202

ANOVA

  df SS MS FSignificanc

e F

Regression 6 3.803062 0.633844 5.68496 1.82E-05Residual 195 21.74149 0.111495Total 201 25.54455      

  CoefficientsStandard

Error t Stat P-value Lower 95% Upper 95%Lower 95.0%

Upper 95.0%

Intercept 0.656571 0.094744 6.929917 5.99E-11 0.469716 0.843427 0.469716 0.843427

GROSS TRANSACT. -0.00083 0.000308 -2.67999 0.007992 -0.00143 -0.00022 -0.00143 -0.00022

DISTANCE 0.053368 0.019189 2.781125 0.005949 0.015523 0.091213 0.015523 0.091213MONTH 0.020453 0.014871 1.375381 0.170591 -0.00888 0.049782 -0.00888 0.049782EMPLOYED -0.06095 0.050194 -1.21425 0.226119 -0.15994 0.038045 -0.15994 0.038045NON-CMC 0.161133 0.048405 3.328861 0.001043 0.065669 0.256597 0.065669 0.256597

LOCATION -0.024 0.055675 -0.43109 0.666879 -0.1338 0.085802 -0.1338 0.085802

Application of Findings-Addresses Bank’s Volume Concern-Placement of an ATM on CMC is projected to be more profitable given the factors shown by the regression-Does not Address the problem of School being out for Summer and Winter Break

Questions?