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How do we know in 15 years it's going to break even

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Nov 13, 2023
The best answer (on Nov 13, 2023) is from:
Clara
Expert
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
Clara
Expert
gave the best answer on Nov 13, 2023
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
Hello! Precisely for the high amount of questions (1) asked by my coachees and students and (2) present in this Q&A, I created the “Math & Formulas - Economic and Financial concepts for MBB interviews”, recently ... (read entire answer)
4
Answers
529
Views
40
Total Upvotes
on Nov 13, 2023 on Nov 13, 2023
Last Activity

How do we get to a break even of ca. 15 years?

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Nov 11, 2023
The best answer (on Oct 13, 2021) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Oct 13, 2021
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
First of all, you need to review terminology and be more careful on how you present things. What you have there as Profit is something else: it is the cummulative cash flow from year 1 to 5 (-32k). However, there is a m ... (read entire answer)
4
Answers
752
Views
30
Total Upvotes
on Nov 11, 2023 on Nov 11, 2023
Last Activity

Break even calculation

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Nov 11, 2023
The best answer (on Nov 11, 2023) is from:
Clara
Expert
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
Clara
Expert
gave the best answer on Nov 11, 2023
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
Hello! Precisely for the high amount of questions (1) asked by my coachees and students and (2) present in this Q&A, I created the “Math & Formulas - Economic and Financial concepts for MBB interviews”, recently ... (read entire answer)
4
Answers
1.9 k
Views
13
Total Upvotes
on Nov 11, 2023 on Nov 11, 2023
Last Activity

the inventory should decrease over time, not stabilize

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Oct 04, 2023
The best answer (on Oct 04, 2023) is from:
Cristian
Expert
#1 rated MBB & McKinsey Coach
Cristian
Expert
gave the best answer on Oct 04, 2023
#1 rated MBB & McKinsey Coach
I had a mentor in McKinsey who was saying that perfection is the enemy of done. Same here :) Great that you spotted the mistakes and hopefully the author will correct it. It's indeed virtually impossible to build perfec ... (read entire answer)
3
Answers
262
Views
7
Total Upvotes
on Oct 04, 2023 on Oct 04, 2023
Last Activity

Shouldn't the break-even be achieved in 13th Year?

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Sep 01, 2023
The best answer (on Jan 17, 2022) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Jan 17, 2022
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
You would be right… if you assume that in year 13 you stop reinvesting in new bottles. But I don't see why you would assume that. So in year 13, while it seems that get to +2.1k positive, please notice that you simultan ... (read entire answer)
4
Answers
721
Views
35
Total Upvotes
on Sep 01, 2023 on Sep 01, 2023
Last Activity

Estimate compounding

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Aug 28, 2023
The best answer (on Oct 01, 2019) is from:
Antonello
Expert
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching
Antonello
Expert
gave the best answer on Oct 01, 2019
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching
As quick answer, of course, is great "something a bit more than $200, we can assume $250" (you can say here $240, $230 or anything higher than 200 but lower than 300, use common sense). No interviewer will ever ask y ... (read entire answer)
4
Answers
10.6 k
Views
115
Total Upvotes
on Aug 28, 2023 on Aug 28, 2023
Last Activity

sell kick-start of bottles

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Jun 27, 2023
The best answer (on Jun 26, 2023) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Jun 26, 2023
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
First year you buy 120 bottles + 6 every month.   So that is 120 in the beginning of the year, but 192 at the end of the year.
3
Answers
356
Views
20
Total Upvotes
on Jun 27, 2023 on Jun 27, 2023
Last Activity

Number of bottles kick-start and Wine Investment Appreciation

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Jun 26, 2023
The best answer (on Jun 25, 2023) is from:
Ian
Expert
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Ian
Expert
gave the best answer on Jun 25, 2023
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Hi there, To be honest, I agree with you. I just went through this case and a cannot figure it outself myself either. Sometimes they say the kick-start is 170, sometimes 120, and sometimes 192. Sometimes it's better to ... (read entire answer)
3
Answers
274
Views
32
Total Upvotes
on Jun 26, 2023 on Jun 26, 2023
Last Activity

Calculation of number of wine bottles in Year 5

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Apr 09, 2023
The best answer (on Apr 09, 2023) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Apr 09, 2023
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
This is how the cash flow should look like: This is the cash flow per year. Each bullet number is the year and between parenthesis the accumulated cash flow -13,5k -13,2k (-26,7k) -13,2k (-39,9k) -13,2k (-53,1k) -13,2k ... (read entire answer)
4
Answers
458
Views
19
Total Upvotes
on Apr 09, 2023 on Apr 09, 2023
Last Activity

Selling In Year 5

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Mar 19, 2023
Anonymous gave the best answer on Mar 19, 2023
Given that the investment strategy is to hold each bottle of wine for exactly 5 years before selling, they will not sell everything in the inventory immediately at year 5.  If we assume that any wine bought is at the en ... (read entire answer)
3
Answers
367
Views
32
Total Upvotes
on Mar 19, 2023 on Mar 19, 2023
Last Activity

Calculation of number of wine bottles in Year 5

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Feb 07, 2023
The best answer (on Feb 07, 2023) is from:
Hagen
Expert
#1 Bain coach | >95% success rate | interviewer for 8+ years | mentor and coach for 7+ years
Hagen
Expert
gave the best answer on Feb 07, 2023
#1 Bain coach | >95% success rate | interviewer for 8+ years | mentor and coach for 7+ years
Hi there, I would be happy to share my thoughts on it: It seems like in the case study, the initial investment is considered to be made in year 0, and as a result, the sale of 120 bottles takes place after 5 years, i.e. ... (read entire answer)
2
Answers
416
Views
8
Total Upvotes
on Feb 07, 2023 on Feb 07, 2023
Last Activity

Graphics and Concluding question

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Dec 18, 2022
Anonymous gave the best answer on Dec 18, 2022
Wine has been growing at almost 10% CAGR since 2003. To be at 20% you would need to outperform this benchmark on a consistent basis. That is a very aggressive assumption.
1
Answer
490
Views
4
Total Upvotes
on Dec 18, 2022 on Dec 18, 2022
Last Activity

Wine consumption

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Jul 17, 2022
The best answer (on Jul 17, 2022) is from:
Ian
Expert
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Ian
Expert
gave the best answer on Jul 17, 2022
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Hi there, Can you clarify where you are seeing that? The solution clearly states 10 bottles/month and 120/year
1
Answer
698
Views
11
Total Upvotes
on Jul 17, 2022 on Jul 17, 2022
Last Activity

What to solve

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Apr 19, 2022
The best answer (on Apr 19, 2022) is from:
Ian
Expert
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Ian
Expert
gave the best answer on Apr 19, 2022
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Hi Ida, It's hard to start a case without knowing how it works! I recommend you look at the intro material on Preplounge or videos on how to case, or even hire a coach. This context will help you a lot more than reading ... (read entire answer)
1
Answer
659
Views
2
Total Upvotes
on Apr 19, 2022 on Apr 19, 2022
Last Activity

Key question 1: What will be the size of my cellar (in number of bottles) over time?

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Feb 11, 2022
The best answer (on Feb 11, 2022) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Feb 11, 2022
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
During a case, you have to ask questions. One of the questions that is relevant here is for how long do you hold the bottles before selling them.The interviewer would tell you it would be exactly 5 years, as per questio ... (read entire answer)
1
Answer
711
Views
10
Total Upvotes
on Feb 11, 2022 on Feb 11, 2022
Last Activity

Diagram 2: What happens between year 5 and 6

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Dec 29, 2021
The best answer (on Dec 29, 2021) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Dec 29, 2021
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
In year 6, you sell both the 120 bottles you bought as initial investment (that's 30k revenue) and the 72 bottles you bought for sale during that year (18k revenue).  So you are actually selling 192 bottles for $48k.  T ... (read entire answer)
3
Answers
704
Views
18
Total Upvotes
on Dec 29, 2021 on Dec 29, 2021
Last Activity

The business model of wine cellar is difficult to come up

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Oct 18, 2021
The best answer (on Oct 18, 2021) is from:
Pedro
Expert
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
Pedro
Expert
gave the best answer on Oct 18, 2021
30% off in March 2024 | Bain | EY-Parthenon | Roland Berger | Market Sizing | DARDEN MBA
When you have a business you don't understand/know much about, you should directly ask “what's their business model? How to they make money?” as a clarification question.You are not being asked to guess the business mod ... (read entire answer)
2
Answers
768
Views
11
Total Upvotes
on Oct 18, 2021 on Oct 18, 2021
Last Activity

economics of the cellar

Oliver Wyman case: Setting up a Wine Cellar
Question edited on Oct 08, 2021
The best answer (on Oct 08, 2021) is from:
Ian
Expert
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Ian
Expert
gave the best answer on Oct 08, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Hi Francesco, Can you clarify where you're getting 120 bottles from? The text as I see it says the following: “Thus at the end of year one, I should have 120+72=192 bottles in the investment section or 242 bottles in th ... (read entire answer)
1
Answer
585
Views
15
Total Upvotes
on Oct 08, 2021 on Oct 08, 2021
Last Activity

Why do you take the 12000$ and 600$?

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Jan 14, 2021
The best answer (on Jan 14, 2021) is from:
Ian
Expert
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Ian
Expert
gave the best answer on Jan 14, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
I agree with Denis. Importantly, for every case we have to be clear about the objective, the maximization criteria (client goals or 2nd objective in a sense), and the constraints. Here, we have: Objective/Maximiza ... (read entire answer)
3
Answers
977
Views
14
Total Upvotes
on Jan 14, 2021 on Jan 14, 2021
Last Activity

why he sell the kick start bottles?

Oliver Wyman case: Setting up a Wine Cellar
Most recent answer on Aug 26, 2020
The best answer (on Aug 26, 2020) is from:
Ian
Expert
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Ian
Expert
gave the best answer on Aug 26, 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Hi, I'm sorry but your question is very confusing. The case specifically states: "You have the kick-start of $13,500 and then only costs for the first 5 years. After 5 years, you sell the kick-start of 120 investmen ... (read entire answer)
1
Answer
1.1 k
Views
8
Total Upvotes
on Aug 26, 2020 on Aug 26, 2020
Last Activity
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