招群專屬大禮包1.0-casebook stern值得信賴一站式職業(yè)發(fā)展教育平臺

小灶計劃值得信賴的一站式職業(yè)發(fā)展教育平小灶是一個面向大學(xué)生的一站式職業(yè)發(fā)展教育平臺。小灶品牌旗下包括以［小灶計劃］、［名企實習(xí)］為代表的四個，以小灶學(xué)徒項目為代表的線下系列，以及即將于2016年8月正式上線的職業(yè)發(fā)展課程(ww-wxiaozaoorg小灶由杜克大學(xué)創(chuàng)業(yè)團(tuán)隊創(chuàng)建，以杜克大學(xué)－新加坡國立大學(xué)專利腦科學(xué)技術(shù)為教育體系建設(shè)，以頂尖MBA職業(yè)教育理念為基礎(chǔ)，結(jié)合創(chuàng)始團(tuán)隊超過40年的職場經(jīng)驗，打造國內(nèi)最高質(zhì)量的大學(xué)生職業(yè)發(fā)展教育平臺。小灶計劃（訂閱號）快速獲取求職干貨

小灶學(xué)徒顧問（服務(wù)號）求職問題有問必答MCAMAN AGEMEN SU LTIN ASSOCIATIONSternSchoolofBusinessNewYorkUniversityCaseInterviewPreparationAconsultinginterviewcanbeamongthemostinlectuallychallenginginterviewsyoufacewhileatStern.Atypicalinterviewconsistsofbothbehavioralandcasetypequestions.Youcanpreparefortheformerbycarefullyreviewingyourresumeanddevelogoodanswerstothequestionsmostcommonlyasked.Thelatter,ontheotherhand,requiresmorerigorouspreparationandisthefocusofthisguide.Asthecaseinterviewmeasuresyourabilitytoassessanunfamiliarsituation,uncoverandaddressrelevantdetails,andarriveataconclusionwhileclearlycommunicatingallthesestepsinastructuredfashion,youcannotprepareyouranswersinadvanceofanticipatedquestions.Thatisnottosaythatyoucannotprepareforthecases.Ifyoulearnbasicframeworksandpracticeapplyingthemtovariousbusinesssituations,yourskilllevelwillimprove,aswillyourchancesofimpressingyourinterviewerwithyourbusinessacumen.Wehopeyoufindthisbookausefulresourceforyourconsultinginterviews.Ofcoursethemostimportantaspectofreadyingyourselfforthecaseinterviewswillbepractice.Youwillgainfarlessvaluebysimplyreadingthecasesthanbyhavingaclassmatecaseyou.Beforewarnedthatwhilemostsuccessful(andunsuccessful)intervieweeswillstatethatacertainamountofcasingisessential,toomuchcanleadyoutolookfortypicalresponsesinsituationsthatrequireoriginalapproaches.CasepracticeshouldhelpyouthinkopenlyinastructuredGoodManagementConsultingAssociationSternSchoolofBusinessNewYorkTableofAnApproachtotheCaseCaseInterviewSampleCaseQuestionsandSuggestedMoreCaseWehopetorefreshthecasesinthebookonaregularbasis.Todothisweneedyourhelp.Pleaseusyourcasesatmca@stern.Pleasebeasdetailedaspossible.Everyadditionalgoodcasewegethelpslaterclassespreparefortheirinterviews.ANAPPROACHTOTHECASEThefollowingisasuggestedapproachtothecaseUnderstandtheBeabsoluysurethatyouunderstandthequestion.Ifyoudonot,thenaskformoreinformation.There’snothingworsethananexquisiystructuredysisofthewrongquestion.Asktheintervieweradditionalquestionstoaddinformationasyoufleshouttheproblem.Donotassumethefirstquestiontheinterviewerasksisthetopicofdiscussion.Rarelydoesaninterviewerstatetheentireproblematthestart.Partofwhatisbeingtestedisyourabilitytoferretoutinformation.Interviewersgenerallywillleadyoudownapathtowardstheanswertheywant.Beopentohintstheymightbeproviding.Becarefulaboutassumptions.Don’tmakeanythataren’tnecessary.Ifyoumustmakeassumptions,communicatetotheinterviewerthatyouaremakingtheassumptionsandstatewhyyouaremakingChooseaChooseanappropriatemodel.Don’ttrytomatchacomplexproduct/marketexpansionmatrixtoaquestionthatiseasilyansweredwithasimpleSWOTysis.Sticktomodelsthatyouknowwell.Nooneknowseverymodelinexistence.Learnafewmodelsverywellthatyoucankeepinyourtoolbag.Haveapassingacquaintancewiththemostpopularframeworks.Onoccasionaninterviewerwillaskyoutouseaparticularframeworktoyzethescenario.Onceyou’vechosenaframework,don’tannounceyourmodeltotheinterviewer.Itisexpectedthattheinterviewerwillunderstandwhatyouareng,andlingthethatyouareusing,forexample,avaluechainysiswillnothelpyourcase.Thisistheexceptiontothe‘morecommunicationisgood’rule.yzetheThisisthemeatofthematter.Usingtheframeworkyou’vechosen,conductanAskquestionstogetmoreinformation.Thiscannotbeoveremphasized.Communicateyourthoughtprocessthroughoutthewholeinterview.Manyinterviewersareveryhelpfulandwillassistyouiftheyseeyoustrayfromthepath.Bewillingtochangetack.Sometimesitturnsoutthatyouchoseanunsuitableframeworkfortheysis.Communicatetoyourinterviewerwhatyou’rengandthatadifferenttypeofysisiswarranted.Youmightgetdingedbutyoumightalsosurviveandgetpointsforbeingflexible.ArriveataConsultantsdon’tdomuchgoodiftheycan’tcomeupwithananswerattheendofanysis.Besuretoarriveatsometypeofconclusionevenifitisaframeworktofurtherevaluatetheproblem.Includereal mendationsforthecompanyasapplicable.Concreteactionsaremuchmoreimpressivethanvaguestrategies.Doa“sanitycheck,”i.e,addressorconsideranykeyvariableswherechangescouldsignificantlyimpactyourysisandconclusion.Alsoaskyourself,“Doesthisanswermakesense?”UsecommonCaseInterviewOnceyouhaveassessedthesituationbygatheringinformation,thenextstepistodeterminewhatframeworkyouwillusetostructureyourysis.Tobegin,itisimportanttokeepinmindthatforanycasethereisno‘correct’answer.Somemodelsworkbetterforspecificsituationsthanothers,butmoreimportantthanchoosingtheverybestmodelisdemonstratingyourabilitytousemodels.Theinterviewerwillexaminetheprocessbywhichyouarriveatyourfinalanswermorethanthefinalansweritself.Havingsaidthat,itisalsocriticalthatatthecloseoftheinterviewyoudoformulateafinalanswertoconcludetheprocess.Whatfollowsareanumberofpopularcasemodels.Thislistisnotmeanttobeanexhaustivecompendiumofalltheyticalmodelsavailabletoconsultants.Itisalistofmodelsthatwe’vefoundusefulintheconfinedscenariosofcaseinterviews.Modelschosenarefairlystraightforward,flexible,andapplicabletoalargearrayofsituations.Itisnotimportanttotrytomemorizethem,butrathertounderstandafewdifferenttypesandbeabletousethemwell.Haveapassingacquaintancewiththemodelsyouchoosenottouse.Porter’sFivePorterwrotethebookonstrategy.Somesayitisdated,butforindustryysesthefiveforcesapproachstillcarriesagreatdealofweight.Theappendixhasmoreinformation.Customers:Therelativebargainingpowerofcustomersandotherrs:TherelativepowerofvendorsandotherCompetitorsjockeyingforposition:CompetitiveenvironmentintheThreatofentrybynewparticipants:BarriersofentryandcurrentprofitabilityoftheindustrycomparedtootherindustriesThreatofsubstitutes:ThedegreetowhichthefirmdifferentiatesitsThisframeworkisextremelyflexibleandcanbeusedforcasesinvolvingalmostanyindustry.Itisbestappliedtocasesthatinvolvecorporatestrategyandnewopportunityquestions.Byyzingeachofthefiveforcesandtheirrelatedareas,youshouldbeabletocomeupwithinsightastowhatcourseofactionshouldbetakenforthecompanyinquestion.Becarefulthough--don’tspendtoomuchtimedwellingonanyoneforce,becauseyoucouldeasilyuseupawholehour.Keepyourgoalinmindanddrivetowardsasolutiontothequestionathand.AmajorlimitationoftheFiveForcesModelisthatitdoesnottakeseveralimportantmarketforcesintoaccount:ernment(Regulation/Tax),TechnologicalChange,andAlliances(Partners).Wheneverappropriatetrytoincludetheseissuesinyourysis.Pertinentcasequestion:ShouldacablenewschannelenterthenewmagazinemarkettoleverageitsOnceyouestablishwhetherornottheycanenterthemarket,youhavetojudgetheprofitabilityofthemagazineindustry.Howcompetitiveisit?AreInternetsitesasubstitute?Arethereanybarrierstoentry?TheThreeThisisanexcellentmodelforyzingstrategyproblemsinvolvingnewopportunities.BesuretoincludeafourthC--Whatistheimpactifanythingchanges?WhatresourcesdoesyourfirmWhatareyourfirm’sstrengthsandWhatisyourfirm’svaluepropositiontotheWhatisyourWhatarethecustomerHowwillwesatisfythoseHowmucharecustomerswillingtoWhoareyourcompetitorsandwhataretheyWhataretheirstrengthsandHowaretheymeetingthecustomer’sWhatistheircostPertinentcasequestion:Shouldanentertainmentcompanyputallitsmoviesontoadigitalmediuminsteadofusingreelsoffilm?Canthecompanydothis?Willitincreaseprofitabilityandvaluetotheconsumer?Willthetheatres,yourcustomers,usethedigitalmedium?Dotheyneedtobeincentivizedintheshortterm?Whatiseveryoneelseng?Willtherebecompetingstandards?Canweimprovevalueand/orreducecostrelativetocompetitorsifwedothis?Remembermanagerial(cost)accounting?Littledidyouknowitwasprovidingyouwithusefulcaseysismaterial!Onetypeofysisinvolvesthego/no-godecision.Shouldacompanyagreetofillaspecialorder?Isitevenworthwhileforacompanytostayinbusiness?Thesetypesofquestionscanbeansweredwithquickanddirtyprofitabilityysiscalculations.Don’tgetoutExcelforthis.Alltheinterviewerwantstoseeisthatyoucandosomequickbutmarginallyaccurateback-of-the-envelopecalculations.Herearethebasiccomponentsforthoseofyouwhodon’tremembermanagerialaccounting:Revenue=Price TotalVariableCosts tyxVariableCostperTotalCosts=FixedCosts+TotalVariableCosts[FixedCosts=Equipment,Administrative,Profits:=Revenue–TotalDon’tforgetissuesrelatedtoopportunityandsunkPertinentcasequestion:Agasstation/mini-marthasincreasingrevenuesbutdecreasingprofits.Istherevenueincreasebasedonanincreaseinunitsalesorpriceincreases?Isthereachangingproductmixtowardshighersalesoflowermarginitems?Havefixedcostsincreased?Haslaborandmarketing emoreexpensive?HasCOGSincreased?Whataccountsfortheincrease?TheFourThismodelisusefulformarketingandnewproductdevelopmentcasequestions.EachPdescribesadifferentsetofissuestobeaddressedwhenyzingamarketingquestion.ThefourPsare:Product:Productdesignfeatures,productdifferentiation,productquality,andproductpackaging.Alsoincludeswarrantyandserviceissues.Price:Productcost,productprice(andcontributionmargin),discounts,andprofitmarginforPromotion:Advertising,reputation,consumerawareness,andspecialPlace:Distribution,timetomarket,andproductPertinentcasequestion:WewanttointroduceaDVDwritablemachine.Whatapproachdo Trytounderstandwhattheproductdoes,especiallyrelativetowhatelseisoutthere.Howdoyouwanttopriceit:costpluspricing,creamskimmingormarketsaturation?Willyouhavebehavioralorfact-basedadvertising?WillyouselltheproductinstoresordirectlytoconsumersviatheInternet?TheValueValuechainysisisanexcellenttoolforyzingvalue-addedprocesses.Theideaistoyzetheentirechainofeventsthroughwhichaproducttravelstogettothecustomer.Atwistonthisistoyzehowanewsystem—automation,forexample—willaffectaproduct’svaluechain.Thistoolisbestappliedinoperations-typequestionsandcanbechangedtofittheparticularsituation.Inotherwords,don’tgetstuckonthefivecategorieslistedhere--foryourcase,maintenanceorR&D,forexample,mightbepertinentcategories.OneofthemostimportantqualitiestodisplayininterviewsistheabilitytoadaptthetoolsyouhavetothesituationatInboundLogistics:Receivingandprocessing ingrawmaterialsandOperations:Describesthecorefunctionofthecompany.Thiscouldbeanythingfromdatainputtomanufacturing,dependingonthenatureofthecompany.OutboundLogistics:Deliverytocustomer.Thiscanincludecategorieslikepackaging,storage,andinstallation,dependingagainonthenatureofthecompany.MarketingandSales:Ifyouneedthisexplainedtoyou,don’tbotherService:ThisincludesitemsfrommaintenancecontractstocustomerSupport:Thisincludesfinanceandaccounting,humanresources,Pertinentcasequestion:Abeercompanywantstosellbottledwater.IsthisagoodDotheyhaveaccesstocleanwateratareasonableprice?Dotheyhavetheabilitytobottletheproductatacostcomparabletoothersintheindustry?Whatistheirexistingdistributionsystem/marketing?Howstrongistheirsalesforce?Isitusefulforsellingbottledwater?HowmuchstraindoestheirexistingbackofficeoperationsThisisanacronymStrengths:Theseincludeadvantagesarisingfromtheobjectives,values,mission,resources,andsystemsofyourcompanyandofyourcompetition.Weaknesses:TheoppositeofOpportunities:Whatareyourmarkets?Howaretheydevelo?Whatareyourlikelyavenuesforgrowth?Arethereanyindustriesrelatedtoyoursthatmayoffergreaterrevenue,economiesofscale,oreconomiesofscope?Threats:Industrytrends,outsideconstraints,tradeunions,regulations,competitorSWOTisaquick-and-dirtytypeysistoolthatiseasilyappliedinnumeroussituations.Itisbestusedinshortercasesthatdon’trequireacomplexysis.Pertinentcasequestion:SeeSouthwestTrytogainfamiliaritywiththeseandothers.Matricesareliketoanindustryaddictedto.Someofthemorefamiliaronesareshownhere.Don’tbeafraidtomakeupyourown.A.BCGOneofthetoolsfromBostonConsultingGroup’sbagoftricks,the2x2BCGMatrixisexcellentforacquisitionysisandportfoliomanagementquestions.Thematrixisbrokenintofourquadrantsbasedonmarketshareandindustrygrowthrate.Market

NewNewCashTheidealmixforaconglomerateistoholdstarsandcashcowsinitsportfoliowhileunloadinganydogsitownsandnurturingpromisingnewventures.Whenthecasequestioninvolvesacompanylookingtogrowthroughacquisition,theidealcandidatesarestarsornewventuresdependingonavailableresourcesandthecompany’sintentions.Acompanywouldmostlikelynotwanttoexpandintoamarketthathasalowgrowthrate,eliminatingcashcows.Product/MarketExpansionAgoodtoolformarketingandcompetitionquestions,theproduct/marketexpansionmatrixyzesyourproductandmarketina2x2matrix.Productsandmarketsaredifferentiatedasexistingornew.Byyzingmarketandproductstatus,theappropriatestrategyisdeterminedfromthematrix.Ifyouusethisframework,youmightconsiderdrawingthematrixfortheinterviewer.Matricesimpresstheoutofpeople.

MarketMarketProductMarketPorter’sGenericThismatrixprovidesavisualrepresentationofPorter’sGenericStrategieswithrespecttocorporatestrategyforindividualproducts.Thecostoftheproductandthescopeofthemarketdrivestrategy.Ifyourmarketscopeisbroad,thenyourproductstrategydependsonproductcost.Ifyourproductcostislessthanthecompetition’sproductcost,thenyoucandifferentiateyourproductthroughlow-costleadershipandwinmarketsharethatway.Ifyourproductcostishigh,thenyoumustdifferentiatetheproductinanotherway,suchashighqualityorsuperiorservice.Inthecaseofnarrowmarketscope,thecompanyisbestservedbyfocusingonitsniche,possiblybyfindingwaystoraiseentrybarriers.StrategicLower

CostCostCostDifferentiationThisapproachcanbeusedinmanysituations,butisespeciallyusefulinyzingthepotentialbenefitsofmergersoracquisitions.Synergiescancomeinmanyforms,butthesearethemostcommon:SpreadingfixedcostsovergreaterproductionGainingsalesfromhavingalargerproductlineandextendingBettercapacityutilizationofBetterpenetrationofnewgeographicLearningvaluablemanagementObtaininghigherpricesbyeliminatingAlwaysconsidersynergiesaspartofalargerprofitabilityorfiveforcesysis.Doesthisacquisition/divestituremakememore/lessprofitable?Doesaverticalacquisitioncreateabarriertoentryorreducethepowerofrs?Internal/ExternalThisframeworkisusedinorganizationversusenvironmentcaseswheretheinternalportionoftheysisreferstotheorganizationandtheexternalportionreferstotheenvironment.Includingothertoolsontheinternalandexternalsidescanthenexpandtheysis.Internally,forexample,avaluechainysisandexternally,Porter’sFiveForces.Alternatively,forasimplercasequestion,merelylistinginternalandexternalfactorsmaybepreferred.Forexample,whenaskedthecauseofacompany’ssuccessyoucouldlistinternalandexternalfactors.Supply/DemandAsProfessorSilberwouldsay,supplyanddemandistherightanswer95%ofthetime.Weallhavethebasicsofsupplyanddemandcurvesdown.Thissimplemodelcanbeveryusefulsodon’toverlookit.Pertinentcasequestion:Taxicabdriverswanttolimitthenumberofmedallionsissued.Passengersclaimtherearenotenoughtaxisonrainydaysorduringrushhour.Explain.Thesupplyofdriversishighduringoff-peakandthedemandforserviceishighduringpeaktimescreatingtwomarkets.Canwesupplyataxorsubsidytoincreasedriversduringpeaktimesanddecreasecarsduringoffpeaktimes?(Maybedrawagraph—again,consultantsloveeye-candy.)Cost-BenefitCost-benefitysisisoneofthebestwaystogetaquickideaofwhetheranopportunitymakesfinancialsenseorwhichwaytogowhenfacingabusinessdecision.Startbyidentifyingyouroptionsandyouropportunitycosts.Onceyouhavedeterminedyouralternatives,listthecostsandbenefitsforeach.Thisysisgenerallyusesthesameingredientsasprofitabilityysis.MarketMarketsizingquestionscanbepartoflargercasequestionsandcanalsobestand-aloneproblems.Thesearedesignedtogetanideaofhowyouunderstandamarket,butalsototestyourtativeskills.Undergraduateliberalartsmajorsshouldexpecttoperformamarketsizingintheirinterviews.Nothingrequiringacalculator,butyoushouldbecomfortablewithbasicaddition,percentages,etc.Intryingtosizeamarketrememberthefollowingframework:WhatisitusedWhousesHowoftenisitThesalientideaistokeepitsimpleandnotmaketheproblemanymorecomplicatedthanitneedstobe.Useroundnumbers,estimate,and,especiallyifyouare fortablengmathbyhand,stayrelaxed.Donotgivetheimpressionthatyouareafraidofnumbers!SomeHandyRulesofThumbforMarketSizingUSpopulation=300million(easiertoworkwiththan250millionor275AveragenumberofpeopleperUShousehold=NumberofUShouseholds=100Pertinentcasequestion:HowmanyeggsareproducedannuallyintheUnitedWhatareeggsusedfor?(cooking,baking)Whousesthem?(300millionpeopleinUS)Howmanydotheyuseperweek?(acoupleforbreakfastandsomemoreinbread,pasta,etc.)Dothemath!SAMPLECASEQUESTIONSANDSUGGESTEDThefollowingsectionconsistsofactualquestionsrecentlyaskedtoSternstudents.Wenotethefirmthataskedthequestion,ifknown.Theactualcandidatewrotethesuggestedanswerandanyeditorialthatappears.Youwillfindavarietyofquestions.Q:ABritishinsurancecompanyisfacingtwoissues.Newlegislationwillrequireallinsurancecompaniestodisclosetheircoststructureandmanagementfeestothepublic.Secondly,new,smallercompetitorshaveemergedthatselldirectlytotheenduser.Thesecompaniesareabletounderpricetheclientandtheyhavegainedmarketshare.Howwouldyouadvisethecompanytorespond?(Booz?Allen)Myresponse:Iwouldfirstwanttoknowhowthisclientcompetedinthemarketplace.Doestheclientofferadifferentiatedproductforwhichitisabletosellatapremiumprice,ordoestheclientsellacommodityproductthatmustsellatthemarketprice?IftheCEOofthecompanyisconcernedenoughtocallinaconsultingcompany,thenthenewcompetitorshavetakenenoughmarketsharetobeconsidereddangerous.Therefore,IwouldwanttoexaminethecoststructureoftheInterviewerHowwouldyoudoIwouldstartbymapouttheprocessesinvolvedwithwritingapolicy,beginningwithaphonecalloraletterthatrequestedapolicytobewritten,andcontinuingwithorderentry,policywriting,creditapproval,finalconstructionofthephysicalproduct,andmailingorfaxingthetothecustomerforapproval.Iwouldattempttocalculatecapacityutilizationforallthefunctionalareas.Ifutilizationsweretoohighinsomedepartmentsandtoolowinothers,Iwouldlookattrainingpeopleinthelessutilizedareastodobeabletodotheworkinthehigherutilizedareas.Iftoomanyoralldepartmentswereunderutilized,Iwouldlookatstaffcutsand/orconsolidatingdifferentfunctionalareas.Perhapssomeworkthatformerlyjustifieditsowndepartmenthas automatedandnolongerjustifiesemployingspecialiststoperformthework.Iwouldalsolookathowmuchtimeittookfortherequesttomakeitthroughthesystem.Perhapsthehand-offsbetweendepartmentsarenotsmooth.Maybessitinanoutboxforadayortwobeforebeingpassedontothenextdepartment.InterviewerOK,thatsoundsgood.Thisclientalsorananin-housedatacenterthatwaslargelyconstructedinthe60sand70s.Theclientwasconcernedthatthismightbealargecostthatjustifiedattention.Iwouldfirsttrytomeasurethepercentageofoverallcostsforwhichthedatacenterwasresponsible.Ifthiswasalargepercentagerelativetoothercostcenters,thenIwouldwanttoinvestigatethissoonerratherthanlater.Let’sassumethatitisalargeexpenseanddeservessomeattention.Iwouldlookatafewpossiblesolutions.Thesystemhasbeenaroundforalongtime.Perhapsadditionalcapabilitieshavebeenaddedovertime.Ifsomepartsofthesystemarenotcompatiblewithotherparts,orifthereareredundanciesinthesystem,Imightsuggesteliminatingtheredundanciesandensuringthatallpartsofthesystemwereabletosharethesamedata.Iwouldalsoinvestigatewhethernewtechnologywasavailablethatcouldbeusedtoreplacethelegacysystem.Thecostofanewsystemmightbejustifiedwhenbalancedagainstthemaintenancecostsoftheoldsystem.Additionally,ifthenewsystemcouldspeedupresponsetimeorreduceerrors,thenthesebenefitsshouldbefactoredintotheFinallyIwouldlookatoutsourcingtheentiredataInterviewerHowwouldyougoaboutIwouldusecost/benefitysis.Iwouldattempttomeasurethecostsavingsfromeliminatingthedatacenter.Thesewouldincludesalaries,theenergycostsassociatedwithrunningthesystem,andtheoverheadcostofthespacethatthedatasystemoccupied.Iwouldmeasuretheseagainstthepricetobepaidforoutsourcingthedatacenter.InterviewerGood,let’sstopthere.Thereisnorightanswerofcourse,butforthisparticularprojectwedidendupeliminatingseveraldepartmentsandcuttingjobs.Wealsolookedatbestpracticesintheindustrytohelpusindeterminingthesereductions.Additionally,wesuggestedoutsourcingthedatacenter,buttherewasstrongtothisbytheindividualwhoranthedatacenter.Hewasabletodefeattheproposalandweendeduppatchinguptheoldsystemandexpectedthistobeashort-term(2-3year)solution.Note:Theinterviewermentionedthehedidnotexpectmetoknowaboutbestpractices.IrespondedthatIwasawareofbestpracticesandthatIshouldhavementionedit.Ingeneral,erview.Q:Ihaveabusinessopportunity.IcanimportaproductfromEuropefor$20/unit.Theshipratesareasfollows:$10/unitforthe1st100units,$20/unitforthenext50units,and$30/unitforallunitsabove150.Ihavefixedoverheadexpenseof$1000.Icanselltheproductfor$45/unitandIcansellasmanyasIimport.Canyoudrawmethemarginalcost-marginalrevenuegraphandthetotalcost-totalrevenuegraph?(Booz?Answer:MC-$30for1st100units,$40fornext50units,$50forunitsaboveMR-$45forallIdeallyyouwouldwanttoproduceatthepointwhereMR=MC.Inthiscasehowever,MRisgreaterthanMCforthe1st150units.($45>$30and$45>$40)Atunit#151,however,MC=$50,whichisgreaterthanMR=$45.Inthissituation,then,150unitsisthenumberthatyouwouldwanttoTheTR-TCgraph:TRstartsattheoriginandisastraightlineincreasingby$45/unit.TCstartsat$1000for0units.Itisastraightlinefrom0-100units,increasingby$30/unit.Itthenincreasesby$40/unitbetween100-150units,and$50/unitabove150units.Note:Beinganeconomicsmajorincollege,IplacedoutofmicroeconomicsatStern.Iwasdefiniyshakyonthegraphs,buttheinterviewerhelpedmethroughthem,ratherthenlettingmedrown.Q:Theclientisamajorcommercialairlinemanufacturer.AnindividualintheISdepartmentsuggeststhatanewvirtualrealitytechnologycanreplacethecurrentCAD-CAMsystemfordesigningairplanes.Howwouldyouframeyourysisintryingtocomeupwitha mendationforthecompany?(Booz?Allen)Itriedtostructurethisusingthe3Cs-customer,company,andCustomer-Ourclientsarepeoplewhobuycommercialaircraft.Theyarelikelyconcernedwithpriceandwithquality.Theywouldalsolikelybeconcernedabouthowlongittakesustorespondtodesignchangerequestsandnewdesignsforairplanesaswell.Iwouldaskthefollowingquestions.Willthisnewtechnologysaveusinproductioncosts,allowingustosellplanesforlessmoneywhilemakingmoremoney?Willthenewtechnologyallowustobringplanestomarketwithfewerbugs/defects,improvingqualityintheeyesofourclients?Willthistechnologyenableustoshortenourproductioncycleandbringaproducttomarketfaster?Company-Isthistechnologyviabletodayorinthenearfuture?Aretherecompetingtechnologies?Willthecompaniesthatwewillbebuyingthenewtechnologyfrombearoundnextyearorinfiveyears?Howreliableisthetechnology?Canweproducethenewsystemin-house?Canweproduceasmallscale,lessexpensivemodelfirsttoseeifwecanreallymakethiswork?Willthistechnologybeabletobecopiedrathereasilybyourcompetitors?Canwemakethisaproprietarytechnologyandholdontothiscompetitiveadvantagelonger?Isthemarketforcommercialaircraftstableorunstable?Ifit’sstablethentheremaybenoneedfornewaircraftdesignsinthenearfuture.Ourcapitalmightbestbeusedelsewhereifthisisthecase.Competition-Howwillourcompetitorsrespond?Willtheyhiretheirownconsultingcompanyandproduceacompetingsystem?Howlongwillthistakethemtodo?Aretheyfocusingondifferentissuessuchasfuelconsumptionorweightandstrengthofthemetalalloysusedtomanufacturing?Arethesemoreappropriateplacesforustofocusourattention?Afteransweringandfyingthesequestions,Iwouldlookatthecashflowsresultingfromthisproject.Iwouldcomeupwithabest-casescenario,aworst-casescenario,andalikelyscenario.InterviewerHowwouldyouincorporateriskintotheIntheinterestratethatIwouldusetodiscountthefuturecashInterviewerCouldyoubealittlemorespecificabouthowyouwouldgoaboutdeterminingtheproperdiscountSure.Ifthecompanyhadalternativeusesforthecapital,