Decide whether to sell both products

Q: Decide whether to sell both products

This question evaluates a data scientist's ability to perform quantitative product‑mix and profitability analysis—covering contribution-margin calculations, cannibalization estimation, capacity-constrained allocation, and fixed-cost recovery modeling—within an Analytics & Experimentation domain.

Q: How do I approach Analytics & Experimentation interview questions?

Analytics & Experimentation questions require understanding of core concepts and practice. PracHub provides solutions with explanations to help you master analytics & experimentation interviews.

Q: What difficulty level is this interview question?

This is a medium difficulty Analytics & Experimentation question, commonly asked during Technical Screen rounds at Capital One.

Q: What role is this question designed for?

This question is commonly asked for Data Scientist candidates at Capital One during technical interviews.

Question

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Decision Rule: Offer Classic and Vegan Burgers Concurrently?

Context

You are evaluating whether a burger chain should sell a vegan burger alongside the classic burger. You have unit economics (price and variable cost per unit) for both items. When both are offered, demand tends to split approximately 2 vegan : 3 classic by units. Offering the vegan item may entail incremental fixed costs (e.g., equipment/training), and the kitchen has a finite capacity per period (e.g., per day).

Assume:

Contribution margins: CM_c = p_c − v_c (classic), CM_v = p_v − v_v (vegan).
Mix when both offered: 2 vegan : 3 classic.
Cannibalization rate k: share of vegan buyers who would have bought classic if vegan were unavailable (0 ≤ k ≤ 1).
Capacity C (units/period) and baseline classic-only demand Q0 (units/period).
Incremental fixed costs to add vegan: ΔF ≥ 0.

Task

Propose a quantitative decision rule for launching both items that explicitly incorporates:

Contribution margin
Cannibalization rate thresholds
Kitchen capacity utilization
Fixed-cost recovery

Also state the minimal incrementality (net-new units, ΔQ) required for the dual-offer to strictly dominate the classic-only scenario.

Decide whether to sell both products

Quick Overview

Decision Rule: Offer Classic and Vegan Burgers Concurrently?

Context

Task

Solution

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