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Brain Teaser Example - Estimate the market demand in gallons for skim milk in the U.S. in a given ye

By: Andrea Rice Super Mentor (3346 points)
Updated: 10/14/2009
Rating: (1)
Tags: management consulting,  case interview,  McKinsey,  Bain,  Booz,  BCG
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Estimate the market demand in gallons for skim milk consumed in the U.S. in a given year.
 
Weak Answer
People are more likely to drink milk in the morning, and kids probably drink the most milk. I’d guess that kids drink 3-4 glasses per day so let’s say 21 glasses per week. That’s probably like a gallon or so. If the average family has 1.5 kids, that’s 1.5 gallons per family. But adults use some milk too for coffee or cereal. That’s maybe another 1/2 gallon per family so now where are we? I think 2 gallons per family per week. That’s 104 gallons per family per week times the number of families. I’m guessing 15 million families with kids so that’s 104 x 15 which is like 15 billion. Oh and there’s the school consumption which is maybe equal to consumer consumption. The answer is around 30 billion gallons.
 
 
Commentary
This candidate does not manage the scope of the question. They focus primarily on consumption of milk by children. The interviewee mentions milk consumption by adults but only appears to calculate milk consumption by adults who have children. In the end the interviewee brings up schools and haphazardly doubles their number to get at a final answer. A more structured approach would have helped considerably.
 
 
The interviewee makes assumptions that appear to just be guesses.  It’s important to talk through the assumptions you are making and why so that the interviewer can follow your logic and provide additional information or direct you down a different path if necessary.
 
 
This answer also illustrates why simplifying assumptions is important. The interviewee makes the math overly complicated by starting with glasses of milk, which need to be converted into gallons. One of their last calculations in which they multiply 104 times 15 million, is wrong by a large magnitude. When possible, simplify your assumptions and use round numbers to make the math easier. 
 
 
Finally, the candidate has forgotten that the question was about skim milk consumption. The analysis appears to have been for milk consumption overall.
 
Strong Answer
The first thing I’d do is define the scope of the problem. We could be looking at consumer or institutional consumption, for example.  I’ll make an assumption that we are only considering milk consumed by households, and not milk purchased by institutions such as schools, restaurants, etc. or milk used to make other products like cheese. The next thing I’ll do is look at the number of households in the U.S., and estimate milk consumption per household. The U.S. population is 300 million. If we assume 3 people per household, then there are 100 mil households. Households with children probably consume 2 or more gallons per milk per week, but other households probably consumer well under a gallon since few adults drink milk as a beverage and if they drink it in their coffee, many purchase coffee outside of the home. Let’s assume that if we averaged these two types of households together, the typical household consumes 1 gallon of milk per week. With 100 million households, there would be 100 million gallons per week consumed nation-wide. There are many different varieties of milk. Consumers can purchase whole, 2%, 1%, skim, lactose-free. We’ll make an assumption that 20% of the market is skim. 20% of 100 million gallons equals 20 million gallons of skim consumed in a week. Multiplying 20 million by 52 gives us just over 1 billion, 1.04 billion gallons of skim consumed during the year.
 
Commentary
The candidate clearly defines the scope of the problem to be solved, milk consumed by households. This makes the question more manageable, and also demonstrates that there are different paths that can be explored if prompted by the interviewer. The interviewee talks through the assumptions they are making – size of the US population and the number of people per household, the market share for skim milk, and their calculations, making it very easy for the interviewer to follow the candidate's approach and intervene and provide additional data where appropriate.
 
 
See other examples of strong and weak answers to brain teasers:
How many street lamps are there in Manhattan 
Crossing the Bridge 

 

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Alain Kagarama  |  Coach (340 points)55 days ago

Very good approach, but I am struggling a bit to get where is the 52 came from, while "multiplying 20 million by 52 gives us just over 1 billion etc"

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