Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview
Anonymous A
on Jul 29, 2020
Global
Question about

Average price decrease calculation

I really enjoyed this case but during the case and reviewing after, the average price decrease calculation doesn't make sense to me. The equation seems to calculate an average decrease for 2019 by subracting the percentage decrease 2018-2019 from 2019 revenue for each segment. However, shouldn't the 2019 figures already have accounted for the decrease in price in 2019? Meaning 80 in the equation below is already based on pricing of 96% (2019) against the benchmark of 2018 (100%). This really threw me and I can't quite figure out the logic of what is happening.

From the case:

"Average price decrease = (Powder revenues Δ Powder price Machine revenues Δ Machines price + Capsules revenues Δ Capsules price) / Total revenues = (80 x -4% + 100 x -7% + 120 x -2%) / 300 = -4%"

2
2.6k
22
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Ian
Coach
on Aug 04, 2020
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

I might be wrong, but my understand is that the question is "The candidate should now calculate the weighted average of the price reduction", implying the impact of price reduction on 2019, not the change from 2018 to 2019

Anonymous B
on Aug 15, 2022

agree.. price has been squared here. Weighted average should be based on price * volume right? price * revenue = price * price*volume …doesn't make sense.

3
Similar Questions
Consulting
Just did the Mckinsey Solve Game (January 2025) - got some questions/insights
on Apr 24, 2025
Global
5
4.2k
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 8+ years consulting, 8+ years coaching and 7+ years interviewing experience
43
5 Answers
4.2k Views
+2
Consulting
Recent Casebook 21-23
on May 29, 2024
Global
6
3.1k
Top answer by
Yousef
Coach
I make it easy for you to master case interviews! (ex-McKinsey |Stanford University | Imperial College London | ex-P&G)
80
6 Answers
3.1k Views
+3
Consulting
How can I improve my performance and stand out?
on May 29, 2024
Global
9
4.4k
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 8+ years consulting, 8+ years coaching and 7+ years interviewing experience
68
9 Answers
4.4k Views
+6
How likely are you to recommend us to a friend or fellow student?
0 = Not likely
10 = Very likely
Thanks for your feedback! Your opinion helps us make PrepLounge even better.