critkeeper11
New member
How exactly do you get an estimate on a projected capture rate for your car wash ? What is the formula or method of coming to a certain figure ? Thank you .
Capture Rate
- Thread starter critkeeper11
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robert roman
Bob Roman
Daily capture rate is ratio of wash volume to traffic count divided by activity. Here, activity is 365 days because you want daily rate.
Volume = 60,000 washes, Traffic = 30,000
Capture rate = (60,000 / 30,000) / 365 = 0.005936
Daily volume = 30,000 * 0.005936 = 178.0822 cars per day
Proof = 178.0822 * 365 = 60,000 washes
Estimate is produced by multiplying 178 and days open. Assume you are open 312 days.
Annual volume = 178 * 312 = 55,500 (rounded)
Here, know definition of count. For accuracy, use average annual daily traffic (AADT) because it includes traffic for year. Average daily traffic (ADT) is obtained from 3 days of 24-hour raw counts. ADT is not adjusted for seasonally or corrected for truck axles.
Capture rate and use have high degree of uncertainty. The reason is the rate is not based on cause and effect. It is not traffic counts that cause wash volume to fluctuate, people do.
Benchmark rates are published by ICA and Auto Laundry News and Professional Carwashing & Detailing magazines. These rates are obtained from survey responses.
These rates have high uncertainty because the calculation is done without information on position (corner, mid-block), access, visibility, geometry (median, traffic signal), demography or competition.
Studies have consistently shown daily capture is unbiased but it is not an accurate or reliable estimator of carwash volumes.
Other methods with more accuracy/confidence are analogue models, regression analysis and gravity and spatial models.
These methods involve increasing levels of data and expense (modeler) but give a more valid number to hang a hat on because estimators are based on cause and effect.
To put into perspective, using the models mentioned above is like a bookie that has extensive years of research in developing predictive models to handicap sports bets.
Using capture rate would be like tossing a coin to predict winner and spread.
Volume = 60,000 washes, Traffic = 30,000
Capture rate = (60,000 / 30,000) / 365 = 0.005936
Daily volume = 30,000 * 0.005936 = 178.0822 cars per day
Proof = 178.0822 * 365 = 60,000 washes
Estimate is produced by multiplying 178 and days open. Assume you are open 312 days.
Annual volume = 178 * 312 = 55,500 (rounded)
Here, know definition of count. For accuracy, use average annual daily traffic (AADT) because it includes traffic for year. Average daily traffic (ADT) is obtained from 3 days of 24-hour raw counts. ADT is not adjusted for seasonally or corrected for truck axles.
Capture rate and use have high degree of uncertainty. The reason is the rate is not based on cause and effect. It is not traffic counts that cause wash volume to fluctuate, people do.
Benchmark rates are published by ICA and Auto Laundry News and Professional Carwashing & Detailing magazines. These rates are obtained from survey responses.
These rates have high uncertainty because the calculation is done without information on position (corner, mid-block), access, visibility, geometry (median, traffic signal), demography or competition.
Studies have consistently shown daily capture is unbiased but it is not an accurate or reliable estimator of carwash volumes.
Other methods with more accuracy/confidence are analogue models, regression analysis and gravity and spatial models.
These methods involve increasing levels of data and expense (modeler) but give a more valid number to hang a hat on because estimators are based on cause and effect.
To put into perspective, using the models mentioned above is like a bookie that has extensive years of research in developing predictive models to handicap sports bets.
Using capture rate would be like tossing a coin to predict winner and spread.
critkeeper11
New member
Thank you . Very insightful reply
1carwash1
Member
I tend to disagree that capture rates are "unbiased"
robert roman
Bob Roman
Here is summary of 2006 study. It was reviewed by James Lani, Ph.D., Collaborative Research Solutions, Inc.
Feasibility requires exam of relationship of expected cash flows and investment.
Decision making hinges on pro forma. Historically, capture rate is used to predict volumes for pro forma. Experience shows rate leads to large errors. If magnitude of error is sufficient, investor may accept (reject) a project when it should otherwise be rejected (accepted).
Experience shows washes on high traffic roads tend to wash high volumes and the causal relationship runs from traffic to volume rather than vise versa.
So, hypothesis for testing validity of capture rate is higher traffic leds to higher volumes.
Scatter diagrams shows counts affect volumes in linear manner. This allows use of regression analysis to test hypothesis.
Here, goodness of fit showed 6.0 percent of movement in volumes is explained by movement in traffic.
Traffic is unbiased (count is directly related to volume) but relationship is weak (not strong positive), meaning not significant.
Other tests were performed (i.e multicollinearity, serial correlation, etc.). These tests confirmed lack of goodness of fit and stability.
Proof is to use regression to make real world predictions.
I used equation to make predictions with study data then compared actual volumes with predicted. The result was very large errors in estimate.
Statistical tests provided evidence traffic is unbiased but not a consistent or efficient estimator of volume. Equation lacked goodness of fit, traffic count and regression equation were not significant and model was unstable.
Therefore, I rejected hypothesis higher traffic leds to higher volumes.
Since capture rate is derived from relationship of volume and traffic, I also reached conclusion capture rate is not statistically valid.
Feasibility requires exam of relationship of expected cash flows and investment.
Decision making hinges on pro forma. Historically, capture rate is used to predict volumes for pro forma. Experience shows rate leads to large errors. If magnitude of error is sufficient, investor may accept (reject) a project when it should otherwise be rejected (accepted).
Experience shows washes on high traffic roads tend to wash high volumes and the causal relationship runs from traffic to volume rather than vise versa.
So, hypothesis for testing validity of capture rate is higher traffic leds to higher volumes.
Scatter diagrams shows counts affect volumes in linear manner. This allows use of regression analysis to test hypothesis.
Here, goodness of fit showed 6.0 percent of movement in volumes is explained by movement in traffic.
Traffic is unbiased (count is directly related to volume) but relationship is weak (not strong positive), meaning not significant.
Other tests were performed (i.e multicollinearity, serial correlation, etc.). These tests confirmed lack of goodness of fit and stability.
Proof is to use regression to make real world predictions.
I used equation to make predictions with study data then compared actual volumes with predicted. The result was very large errors in estimate.
Statistical tests provided evidence traffic is unbiased but not a consistent or efficient estimator of volume. Equation lacked goodness of fit, traffic count and regression equation were not significant and model was unstable.
Therefore, I rejected hypothesis higher traffic leds to higher volumes.
Since capture rate is derived from relationship of volume and traffic, I also reached conclusion capture rate is not statistically valid.
critkeeper11
New member
Sounds just like a guesstimate to me based on some logical factors . But there are so many external factors affecting each individual location that how can 1 formula apply to all washes ? After doing some research on the net and this site sounds like somewhere between 3/10 of 1% on the low side and 1/2 of 1% on the highside of the adv is about the range agreed upon by most . I used the average of the 2 numbers when i was calculating a projected capture rate for the wash im looking at .
1carwash1
Member
I think you are spot on. It’s good you picked up on this early in the game. In my opinion, there is more to this than just studies & projections. Even though we consider the tangibles, at the end of the day it’s just got to feel right.
robert roman
Bob Roman
“In my opinion, there is more to this than just studies & projections. Even though we consider the tangibles, at the end of the day it’s just got to feel right.”
Of course, there is more to it than just studies and projections.
However, just as experience and intuition cannot be underestimated in operating a wash, operators should not underestimate the capacity for formal techniques to solve problems.
People without the experience that fly by the seat of their pants often fall flat on their asses.
Of course, there is more to it than just studies and projections.
However, just as experience and intuition cannot be underestimated in operating a wash, operators should not underestimate the capacity for formal techniques to solve problems.
People without the experience that fly by the seat of their pants often fall flat on their asses.
