Compare two stores’ profits rigorously

Quick Overview

This question evaluates a data scientist's skills in experimental design, causal inference (including difference-in-differences), measurement and metric construction for profitability, uncertainty quantification (confidence intervals and power checks), and operational guardrails for real-world data collection.

Compare two stores’ profits rigorously

Company: Google

Role: Data Scientist

Category: Analytics & Experimentation

Difficulty: hard

Interview Round: Technical Screen

Two snack shops sit at a school gate and operate simultaneously. You have 14 days to recommend which will deliver higher profit over the next quarter. Design a measurement and analysis plan that yields a defensible decision under real-world constraints. Specify: 1) The exact primary metric (e.g., profit per passerby per open hour) and why it is decision-aligned; include what costs and revenues are in-scope and how you will normalize for traffic and hours. 2) The minimum data you will collect (hourly foot traffic counts, transaction counts and AOV, item-level margins, labor hours, rent/utilities allocation, weather, school calendar, competitor promotions/price changes). 3) Your identification strategy—experiment (e.g., randomized flyer distribution or alternating queueing) or quasi-experiment (e.g., hour-level difference-in-differences with fixed effects and weather controls)—that remains valid under: weekday/weekend and exam-week spikes, Store B extending hours, Store A weekend discounts, and a price change by one shop on day 9. 4) The model and uncertainty: write the DID regression you would fit (define outcome, treatment, fixed effects, controls), how you’d compute a 95% CI for the profit delta, and a minimal power check showing 14 days is sufficient (order-of-magnitude inputs are fine). 5) Guardrails to detect stockouts/cannibalization and your explicit decision rule (e.g., recommend Shop X if estimated Δprofit > $Y per day and CI lower bound > $Z).

Quick Answer: This question evaluates a data scientist's skills in experimental design, causal inference (including difference-in-differences), measurement and metric construction for profitability, uncertainty quantification (confidence intervals and power checks), and operational guardrails for real-world data collection.

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Oct 13, 2025, 9:49 PM
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Prompt: 14-Day Plan to Decide Which Snack Shop Will Be More Profitable Next Quarter

Context: Two snack shops operate simultaneously at a school gate. You have 14 calendar days to collect data and produce a defensible recommendation on which shop will deliver higher profit over the next quarter.

Design a measurement and analysis plan that yields a robust decision under real-world constraints.

Deliverables

  1. Primary metric
    • Specify the exact primary metric (e.g., profit per passerby per open hour) and explain why it is decision-aligned.
    • Define in-scope revenues and costs, and how you will normalize for traffic and hours.
  2. Minimum data to collect
    • List granular data you will collect, at least: hourly foot traffic, transactions and AOV, item-level margins, labor hours, rent/utilities allocation, weather, school calendar, competitor promotions and price changes.
  3. Identification strategy
    • Propose either an experiment (e.g., randomized flyer distribution or alternating queueing) or a quasi-experiment (e.g., hour-level difference-in-differences with fixed effects and weather controls).
    • Ensure the approach remains valid under: weekday/weekend and exam-week spikes, Store B extending hours, Store A weekend discounts, and a price change by one shop on day 9.
  4. Model and uncertainty
    • Write the DID regression you would fit: define outcome, treatment, fixed effects, and controls.
    • Explain how you would compute a 95% confidence interval for the profit delta.
    • Provide a minimal power check to show that 14 days is sufficient (order-of-magnitude inputs are fine).
  5. Guardrails and decision rule
    • Define guardrails to detect stockouts and cannibalization.
    • State the explicit decision rule (e.g., recommend Shop X if estimated Δprofit > Y/dayandCIlowerbound>Y/day and CI lower bound > Z).
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