Recommendations on What to Do for Low Registration Conference

Decision Making
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A. What alternatives are available to Anna and Ethan about holding the conference?
One potential course of action for the conference organizers would be to proceed as planned, hypothesizing that the low registration rate may be attributable to medical professionals' propensity to register at the last minute. However, this approach would entail significant risk, as the current registration rates are markedly lower than anticipated.
Another course for the organizers would be to cancel the conference altogether. While this option is not without its drawbacks—namely, the potential loss of a non-refundable deposit and the imposition of a cancellation fee—it could be a prudent decision in the long run. By canceling the conference, the organizers would circumvent the risk of a poorly-attended event, which could ultimately prove to be an even greater financial liability.
The third option would be to reschedule the conference to a later date. This approach would afford the organizers additional time to disseminate promotional materials and address logistical concerns that may have undermined the initial mailing. By rescheduling the conference within four months of the original date, the organizers could also avoid incurring a cancellation fee from the University Parks Inn. However, this option is not without its challenges. The organizers would need to verify the availability of all speakers for the new date, and they would also need to ensure that Steve Smith is reimbursed for any expenses related to alter his travel plans.
Considering the three options available, a case can be made for option 3 (rescheduling the conference) as the most prudent choice. One benefit of this option is the potential for increased registration revenue. By conducting additional mailings and expanding their reach to 8,000 individuals, the organizers could anticipate a registration response rate of 2% or 160 people. Assuming that 10% of registrants qualify for the reduced fee, the projected registration income would amount to $104,250—a substantial increase from the $69,500 currently anticipated. Additionally, expenses would not be drastically affected. Although the organizers would need to fund two new mailings and reimburse a speaker for a flight change fee, they would evade a costly cancellation fee and avoid the need to rent a meeting room. Comparing the two scenarios, the net income from rescheduling the conference would be $50,300, as opposed to the $26,800 currently projected.
B. Pro-forma income statements for each of the alternatives you identified in question (a)
Alternative 1: Continue with the conference as planned
Income:
Registration fee income: $69,500
Expenses:
Meals: $15,000
Conference materials: $7,500
Direct mail advertising: $6,000
Meeting room rental: $4,500
Equipment rental: $500
Speaker fees:
- Newton: $600
- Smith: $2,000
- Townsley: $1,000
- Compton: $200
Total expenses: $42,700
Net income: $26,800
Alternative 2: Cancel the conference
Income: None
Expenses:
Cancellation fee to University Parks Inn: $10,000
Non-refundable deposit to William Townsley: $1,000
Total expenses: $11,000
Net income: -$11,000
Alternative 3: Reschedule the conference
Income:
Registration fee income: $104,250
Expenses:
Meals: $22,500
Conference material...