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Problem Statement Worksheet (Hypothesis Formation)

Context

Constraints within solution space

Criteria for success

Stakeholders to provide key insight

Scope of solution space

Key data sources

Big Mountain Resort recently added an additional chair lift, increasing operating costs by $1.54 million this season. The business wants to implement a more efficient way to value their ticket price. They also want to consider other changes that can cut costs without cutting ticket value or that will support a higher ticket price.

The project scope does not explicitly articulate a time-based financial goal. A simple baseline goal would be to offset the increased operating costs with an equal or greater increase in projected revenue for the coming season. This goal should be confirmed or modified by a financial stakeholder that can explain the expected ROI of the additional lift and any other financial goal that Big Mountain Resort has.

<What is the focus of this business initiative? I.e. What are the specific items will you focus on exclusively?> The primary focus is on the valuation of tickets. The secondary focus is on changes to operation that will cut costs or support a higher price. To these ends, I would focus on the relationship between supply (data from nearby slopes, available lifts, days open, etc.) and demand (average visitor count) to create a pricing model. Once a model is established, the supply parameters can be tweaked to identify ways to increase ticket value or reduce costs.

<What constraints exist that may prevent this business initiative from succeeding?> The current data set only contains data related to internal features of the business. It does not contain historical data on visitor count or the distribution of visitor count across a season. The absence of this data could limit the pricing model from factoring in demand changes across time. There is also a lack of definition in the scope of what can be changed to cut costs that needs to be clarified by stakeholders. Lastly, aside from the cost of the new lift and the price of tickets, there is no financial data to analyse the cost of other expenses.

I am currently only working with a CSV that contains data about slope features for various ski slopes across the country. I also need to consider the cost of the additional lift chair and the 350,000 expected visitors each year as key data points.

<Who are the key stakeholders that need to be involved in this project? Where will you source your data from and who will you present your recommendation to once you have identified a solution?> The key stakeholder that I will be presenting my findings to is Jimmy Blackburn, Director of Operations. I also need to connect with Alesha Eisen to discuss available data and requirements for accessing data.

How can Big Mountain Resort change their ticket valuation model to offset the $1.54 million

increase to their operating expenses with an equal or greater increase in projected ticket

revenue before the end of the coming season?

Hypothesis: Create a Hypothesis with an emphasis on SMART principles. (S – Specific, M – Measurable, A – Achievable, R – Realistic, T – Timebound). If you cannot do this, you do not have a good grasp on the business problem.

Context: With context, we have clearly identified the problem at hand and have elucidated on how our initiative may solve this problem, alongside the commercial implications this will have on the business.

Criteria for Success: Clearly defining the criteria for success ensures that the scope of your work is clearly defined and understood. Otherwise, if this isn’t defined – your work will never end which will result in mismatched expectations.

Scope of Solution Space: Scoping out the solution space ensures that the business initiative is SPECIFIC for a certain segment or area. This prevents solutions that have been developed being scaled and applied for all other business units that the solution may not be responsible or scalable for.

Constraints within Solution Space: Looking forward, what are the foreseeable problems we are likely to encounter? Could this be stakeholder resistance? Could this be we don’t have access to the right data?

Stakeholders to provide key insight: Who are the people I need to speak to, to get the answers I need for my data analysis?

What key data sources are required?

Based off my discussions with the key stakeholders – can we clearly list out all the data sources we need so we can make a highly targeted request as opposed to a scatter-gun approach where we ask for a bit of everything?