Evaluate Profit Impact Before Joining Coupon Site
Overview
This question evaluates a candidate's ability to analyze unit economics, profitability calculations, and business metrics such as demand, average check, commission impacts, and fixed versus variable cost effects.
Capital One
Jul 12, 2025, 6:59 PM
Data Scientist
Onsite
Analytics & Experimentation
65
0
Restaurant Coupon Decision: Factors and Unit Economics
Context
You operate a restaurant. A deals platform proposes selling coupons. For coupon tables, the platform charges a 40% commission on the table's sales. Your current unit economics:
- Daily demand: 20 tables/day
- Average check (baseline): $30 per table
- Variable cost: 40% of sales
- Fixed cost: $100/day
Assume one coupon can be used per table and that variable and fixed costs do not change with the decision.
Tasks
- Before deciding, list the key factors you would evaluate (e.g., price elasticity, cannibalization, customer acquisition, brand impact, capacity, etc.).
- Compute your current daily profit (without the platform).
- If you join and pay a 40% commission, what is the minimum average spend per coupon table that keeps profit unchanged if a coupon table replaces a regular table (i.e., total tables stay at 20)? Show the logic.
- Given that figure, would you initially join the site? Explain your reasoning.
- After joining you observe: 25 tables/day, 10 tables use coupons, average check = $36, costs unchanged. Compute the new daily profit and determine whether participation raises or lowers profit. Based on this result, should the restaurant keep working with the site?
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