Night 50% and Daytime 50%?

Airport taxi
New answer on Mar 23, 2020
3 Answers
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Anonymous A asked on Mar 21, 2020

I don't get the part:

Night: 50%*20%*84,000,000=8,400,000 passengers per year - 3,835 passengers per hour; (8,400,000/365/6hours)

Is it assuming that 50% of the taxi demand is at night?

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Daniel
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replied on Mar 21, 2020
McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

Hi!

No, it is assuming we have 50% of passengers during the night and 50% during the day – but the day and the night have different duration, therefore you have different # of passengers per hour of day vs per hour of night:

Day: 8,400,000/365/18hours = 1,278 passengers per hour

Night: 8,400,000/365/6hours = 3,835 passengers per hour

That in turn means that you have different utilisation rate for day and night:

Day: 1,278 passengers per hour divided by 2.100 taxis per hour = ~61% utilization rate (hourly supply of taxis exceeds hourly demand of passengers)

Night: 3,835 passengers per hour divided by 2.100 taxis per hour = ~183% utilization rate (hourly demand of passengers exceeds hourly supply of taxis)

I hope this is helpful! Please don't forget to upvote and if you have further questions, just DM me.

Best,
Daniel

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Clara
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replied on Mar 22, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Long story short: Yes, it means 50% of the demand is at night (i.e., 50% of the total passenger use it during night time)

However, the key thing is to realize that the duration of the day and night shifts are different (18h vs. 6h), and hence, even if demand is 50-50, utilization rate is not.

Hope it helps!

Cheers,

Clara

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Antonello
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replied on Mar 23, 2020
McKinsey | MBA professor for consulting interviews

Yes, 50% of demand is during the 6 hours of the night time.

Best,
Antonello

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Daniel gave the best answer

Daniel

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