Which one would result in more revenue this year?

Question

Dear community member

I have a question regarding a case study mentioned in Bain&company website, here is the link

https://www.bain.com/careers/interview-prep/case-library/fashioco-case-study/

my Q is about the second part: Which one would result in more revenue this year?

in this part, I got confused about the calculation of intermittent sales. why in the calculation, we have 10 million people in both 40$ and 75$ purchase...

to me, it should be

2.5 mil person * 40$ AND

7.5 mil person * 75$

look forward to having your opinion.

Thank you

Answer 1

Hi Mehrasa,

Very important lesson here in casing: The details matter!

The case is indeed correct.

Option A (Rewards Program):

# of customers: 10M (assume flat)

Estimated number of customers participating in Y1: 25%

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Option B (Intermittent Sales):

Customers (flat): 10M

See the difference? Intermittent sales says nothing about customer breakdown changing, while the rewards program does.