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Condominium Pricing

Concepts

  • Pricing Models
  • Cost per Area

MEA Description: The Condominium Pricing MEA requires teams of students to develop a generalizable procedure to create a pricing model for condominiums in a the newly developed Morgan Place Complex. The motivation for developing this procedure is established using a realistic context in which the company needs to demonstrate that the model is competitive with similar units in the area to obtain financial backing. The Real Estate Division Director wishes to be able to quickly establish the price of any unit in the complex using the model. The teams must take into account the size of the unit and the features associated with a given unit such as the presence or absence of a balcony or lake view.

Implementation Strategy:

  1. Individual Activity � Individually, students read the interoffice memo and press release from the client which establishes the need to create a pricing model to quickly establish the price of a condominium based on the properties of the unit. Students individually begin to explore what features of a condominium would affect the unit base price and what features would affect monthly homeowners fee. The focus is on establishing what factors may need to be considered for pricing of a condominium.
  2. Team Activity � In teams of 4, students develop a memo to the client detailing which features of the condominiums have an impact on the base price, how heavily they impact that price, and how those factors will be used in the pricing model. The goal is to have students begin to identify the components of their final pricing model before they develop the operation of that model as part of their homework.
  3. Homework - Continuing in teams of four, students develop a complete procedure based on TA feedback of the original list of factors. Students are asked to develop a pricing model to assess the price of a condominium based on the features and properties of a given condominium unit. As part of the deliverables, students are required to submit a description of the base unit, a description of how each feature contibutes to the base price, an explanation of how the model was developed, and a description of how to apply the development methodology to a different condominium complex being developed.

Six Principles:

Principle Description How the principle is addressed in the MEA?
Model Construction Ensures the activity requires the construction of an explicit description, explanation, or procedure for a mathematically significant situation
Describe the mathematical model the students will be developing when solving this MEA:
  • What are the elements?
  • What are the relationships among elements?
  • What are the operations that describe how the elements interact?
Elements – Unit square footage, number of bedrooms/bathrooms, floor, balcony availability, amount of lake view
Operators – The weights applied to each factor to form the final price
Relationships – How the elements are weighted to form the final price
Reality Requires the activity to be posed in a realistic engineering context and be designed so that the students can interpret the activity meaningfully from their different levels of mathematical ability and general knowledge
Describe the context. What is the story?
What knowledge will students need to bring to this problem?
What background information must be provided?

Describe how the problem is open-ended.
Pricing models are a common problem throughout throughout industry.
Self-Assessment Ensures that the activity contains criteria the students can identify and use to test and revise their current ways of thinking
What is provided in this MEA that students can use to test their ways of thinking?
Students are given data for a competing condominium complex to help develop their own pricing model. It can also be used to assess the quality of their own solutions.
Model-Documentation Ensures that the students are required to create some form of documentation that will reveal explicitly how they are thinking about the problem situation
What documentation are the students being asked to produce in this MEA?
Memo to the client describing the procedure for processing the condominium properties
Construct Share-Ability and Re-Usability Requires students produce solutions that are shareable with others and modifiable for other engineering situations
What will indicate to the students that a sharable, reusable, or generalizable solution is desired?
Sharable – produce a model that the company can use to determine the price of any unit in the condominium complex.
Generalizable – the model should be general enough so that it can be applied to existing units and result in similar prices to those of the established unit prices.
Effective Prototype Ensures that the solution generated must provide a useful prototype, a metaphor, for interpreting other situations
What are other examples of structurally or conceptually similar problems that would required a similar solution?
Pricing models are common across every aspect of industry.

Files:

History:
Tested in ENGR106 - Spring 2005