Analysis of Condominium Design and Pricing

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Analysis of the Case: CONDOMINIUM DESIGN AND PRICING: A CASE STUDY IN CONSUMER TRADE-OFF ANALYSIS Q1. What are the strengths & weakness of the studies ? The major residential complex across the Hudson River from midtown Manhattan comprised of six high-rise buildings that contain 4,000 condominium homes ranging in size from 1-bedroom to 3-bedroom, 3-bath. There are a total of six possible apartment configurations with prices that vary by floor and view. The river views that overlook New York City are higher priced, as are the higher floors. The most premium apartments are on the 31st floor facing New York in a 3-bedroom, 3-bath configuration on a corner of the building, going for $393,500. The lowest price condominium home is $175,000 for a 1 bedroom on the lobby floor. The developer has chosen conjoint analysis to accomplish the following objectives. First, based on the rank order of preference for condos differing in their combinations of view, floor height, unit size and price, the developer is looking to calculate the relative theoretical utilities of each. Second, each respondent's utilities for the various levels of each attribute have been analyzed and rank-ordered. Third, a mathematical model will be designed to simulate the sell-out of each specified building, varying pricing scenarios to see which will yield the optimal results. Fourth, the study seeks to define the optimal set of prices that would cause the building to sell out as evenly as possible. The

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