Determine Weekly Break-Even Point for Diaper Service
Company: Capital One
Role: Data Scientist
Category: Analytics & Experimentation
Difficulty: medium
Interview Round: Onsite
##### Scenario
Subscription diaper-delivery & cleaning service: 350 babies; charge $20/baby/week; deliver 80 diapers per baby weekly; each baby uses 72 diapers/week; cleaning cost $0.05 per used diaper; delivery cost $10/baby/week; fixed overhead $1,040 per week.
##### Question
What is the weekly break-even point (expressed in number of babies served or weeks) for the business given the pricing and cost structure?
2) If deliveries begin on Monday, Jan 1, and diapers are collected, cleaned, and re-used weekly, how many unused diapers remain in inventory on the third Monday?
3) Suppose inventory is insufficient for scheduled deliveries in week 3. Suggest three operational levers the business could pull to avoid stock-outs.
##### Hints
Use contribution margin to find break-even; build a stock-flow timeline for inventory; think about capacity, collection frequency, and sourcing options.
Quick Answer: This question evaluates unit-economics, inventory flow, and basic financial modeling skills relevant to pricing, break-even analysis, and capacity planning for a subscription-based operational service.
