Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Ian

100% Recommendation Rate

291 Meetings

25,055 Q&A Upvotes

USD 289 / Coaching

1

How would you estimate the cost of Boeing 747?

1 answer

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Ian

100% Recommendation Rate

291 Meetings

25,055 Q&A Upvotes

USD 289 / Coaching

That's a tricky one and there are a few options. Like most market sizing questions, there are a number of approaches and you need to pick the approach that best uses your existing knowlege in this world. The main options I see are:

1) Boeing company breakdown (top-down). Think about Boeing's market cap or annual revenue. Then break down their various parts of the business (i.e. Commercial, Defense, Space, etc). Then, within Commercial, think about how many types of planes they sell and % of that business the 747 makes up.

2) Airline company breakdown (top-down): Think about a given airline (i.e. Delta) and their costs. Follow a similar logic to approach #1

3) Cost comparison: Look at costs of lower-end and higher-end products. I.e., talk about high-end cars, private jets, figher jets, space shuttles, etc. You probably have an idea of around what each of these cost. Then put commercial planes on this scale. Within there, come up with a range for the Boeing 747

4) Components summation (bottom-up): This one is tough, and I wouldn't do it, but if you have an engineering background you might prefer it. Think of the sum-of-parts for a Boeing 747. I.e. 4 jet engines, the body/hull, fitout (electronics, etc.), R&D write-down, etc. From here you can think of a cost of production and put a nice margin on top

Again, it's less about "The Right Approach" and more about which approach shows clear/organised thinking and appropriate assumptions.

That's a tricky one and there are a few options. Like most market sizing questions, there are a number of approaches and you need to pick the approach that best uses your existing knowlege in this world. The main options I see are:

1) Boeing company breakdown (top-down). Think about Boeing's market cap or annual revenue. Then break down their various parts of the business (i.e. Commercial, Defense, Space, etc). Then, within Commercial, think about how many types of planes they sell and % of that business the 747 makes up.

2) Airline company breakdown (top-down): Think about a given airline (i.e. Delta) and their costs. Follow a similar logic to approach #1

3) Cost comparison: Look at costs of lower-end and higher-end products. I.e., talk about high-end cars, private jets, figher jets, space shuttles, etc. You probably have an idea of around what each of these cost. Then put commercial planes on this scale. Within there, come up with a range for the Boeing 747

4) Components summation (bottom-up): This one is tough, and I wouldn't do it, but if you have an engineering background you might prefer it. Think of the sum-of-parts for a Boeing 747. I.e. 4 jet engines, the body/hull, fitout (electronics, etc.), R&D write-down, etc. From here you can think of a cost of production and put a nice margin on top

Again, it's less about "The Right Approach" and more about which approach shows clear/organised thinking and appropriate assumptions.

(edited)

Related case(s)

Brain Teasers - U2 Concert

Solved 10.0k times
Brain Teasers - U2 Concert Number sequence Situation: “You and I will take turns saying numbers. The first person will say a number between 1 and 10. Then, the other person will say a number that is greater than the first number. The difference between both numbers must be between 1 and 10. We will keep going back and forth in this way until one of us says the number 50. That person wins. You will start.”   Question: What number should you start with? U2 Concert Situation:  U2 has a concert that starts in just 17 minutes. To get there, all the band members must cross a bridge. Since the bridge is old, a maximum of two people can cross the bridge at any one time. To make matters worse, it is dark and there is only one torch. Anyone crossing the bridge must carry a torch. The torch cannot be thrown across the bridge. Instead, someone must walk it back to the other side. Each band member walks at a different speed. If two members cross at the same time, both must walk at the speed of the slower band member. Bono takes 1 minute to cross. Edge takes 2 minutes to cross. Adam takes 5 minutes to cross. Larry takes 10 minutes to cross. Question: Can the band make it to the concert in time? How will they manage this? Buckets Situation: You have a 5-gallon bucket and a 3-gallon bucket. (Assume that you have an unlimited supply of water and that the buckets do not have any markings for measurement. Question: How can you get 4 gallons of water into the 5-gallon bucket? Cigars Situation: A homeless man collects cigar butts. He uses 5 cigar butts to make a new cigar. Today, he has collected 25 cigar butts. Question: How many cigars can he smoke?
4.3 5 402
| Rating: (4.3 / 5.0) |
Difficulty: Intermediate | Style: Brain Teaser | Topics: Brain teaser

Number sequence Situation: “You and I will take turns saying numbers. The first person will say a number between 1 and 10. Then, the other person will say a number that is greater than the first number. The difference between both numbers must be between 1 and 10. We will keep going back and forth ... Open whole case

Brain Teasers - Motel

Solved 9.6k times
Brain Teasers - Motel Motel Situation: Three friends check into a motel for the night. The clerk tells them the bill is $30, payable in advance. They each pay the clerk $10 and go to their room. A few minutes later, the clerk realizes he has made an error and overcharged the trio by $5. He asks the bellhop to return $5 to the 3 friends who had just checked in. The bellhop sees this as an opportunity to make $2 as he reasons that the three friends would have a tough time dividing $5 evenly among them; so he decides to tell them that the clerk made a mistake of only $3, giving a dollar back to each of the friends. He pockets the leftover $2 and goes home for the day! Question:  Now, each of the three friends gets a dollar back, thus they each paid $9 for the room which is a total of $27 for the night. We know the bellhop pocketed $2 and adding that to the $27, you get $29, not $30 that was originally spent. Where did the other dollar go? Murder Situation: The midnight train is coming down the mountains. Art Farnanski seems to be sleeping in his seat. At the station, all the passengers get off the train except one. The conductor comes and taps him on the shoulder to let him know they have arrived. Art Farnanski does not answer. He is dead. Hours later the four people that had shared the train compartment with the dead man are at the police station. The man in the dark suit: "I'm innocent. The blonde woman was talking to Farnanski." The blonde woman: "I'm innocent. I did not speak to Farnanski." The man in the light suit: "I'm innocent. The brunette woman killed him." The brunette woman: "I'm innocent. One of the men killed him." Question: The police detective comes up to you and says: “I know that four statements are wrong and four are true. Who killed Farnanski? (Only one person is guilty).” Trees Statement: You have 10 trees and you have to plant them in five rows, but each row must contain 4 trees. Question: How is this possible?
4.6 5 468
| Rating: (4.6 / 5.0)
Difficulty: Intermediate | Style: Brain Teaser | Topics: Brain teaser

Motel Situation: Three friends check into a motel for the night. The clerk tells them the bill is $30, payable in advance. They each pay the clerk $10 and go to their room. A few minutes later, the clerk realizes he has made an error and overcharged the trio by $5. He asks the bellhop to return $5 ... Open whole case

Brain Teasers - Pirates

Solved 7.7k times
Brain Teasers - Pirates Pirates Situation: Five pirates are trying to split up 1000 gold pieces. The rules are as follows: Pirate #1 must divide the gold up in such a way that a majority of the pirates (including himself) agree to. If he does not get a majority vote, he will be killed, and pirate #2 will get to propose a solution to the remaining 3 pirates, and the same rules will follow. This continues until someone comes up with a plan that earns a majority vote. The pirates are infinitely greedy, infinitely ruthless (the more dead pirates the better), and infinitely intelligent.                        Question: What is the highest amount of gold pieces that pirate #1 can keep and what would his proposal be?             Chicken Situation: A man is traveling with a fox and two chickens, if he leaves the fox alone with the chickens the fox will eat the chickens. He arrives at a river and needs to cross it. He finds a small boat that can carry only him and one animal.          Question: How does he get himself, the fox and the two chickens across the river safely?
4.5 5 416
| Rating: (4.5 / 5.0)
Difficulty: Intermediate | Style: Brain Teaser | Topics: Brain teaser

Pirates Situation: Five pirates are trying to split up 1000 gold pieces. The rules are as follows: Pirate #1 must divide the gold up in such a way that a majority of the pirates (including himself) agree to. If he does not get a majority vote, he will be killed, and pirate #2 will get to propose ... Open whole case

Caribbean Island – MBB Final Round

Solved 7.2k times
Caribbean Island – MBB Final Round A wealthy client has recently bought an island in the Caribbean. She has engaged us to identify possible uses for her new island.
4.6 5 392
| Rating: (4.6 / 5.0)

A wealthy client has recently bought an island in the Caribbean. She has engaged us to identify possible uses for her new island. Open whole case

Brain Teasers - Firefighter

Solved 7.1k times
Brain Teasers - Firefighter Firefighter Situation: A firefighter stood on the middle rung of a ladder, spraying water on a burning house. He then climbed up 6 rungs before the heat of the flames caused him to come down 10 rungs. After some minutes he was able to climb 18 rungs to the very top of the ladder. Question: How many rungs did the ladder have? Bartender Situation: There are two twin old men that go into the same bar every day. The bartender at the bar hates one of the twins, but there is only one way he could tell the difference between them: The one that he hates drinks very slowly and the one that he likes drinks fast. One day the bartender decides to kill the one that he hates. So when they came in that day he put the same amount of the drink in their cups, the same amount of ice, and the same amount of poison. When they are both done with their drinks the one that the bartender hates dies, but the one he likes lives. Question: How is this? Hats Situation: There are 4 people sitting in a row, trying to win a riddle. The one in front was wearing a red hat. The second from the front was wearing a blue hat. The third from the front was wearing a red hat. The last was wearing a blue hat and is blind-folded. Each of them was informed that they are all wearing a hat, the last person is blind-folded and that there are 2 red and 2 blue hats. They can only see the persons in front of them and are not allowed to turn around and see behind them. Question: The one who guesses the color of his hat wins the prize. Who is it?  
4.5 5 69
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Brain Teaser | Topics: Brain teaser

Firefighter Situation: A firefighter stood on the middle rung of a ladder, spraying water on a burning house. He then climbed up 6 rungs before the heat of the flames caused him to come down 10 rungs. After some minutes he was able to climb 18 rungs to the very top of the ladder. Question: How m ... Open whole case