Quantify and Forecast DoorDash vs. In-Store Price Inflation

Q: Quantify and Forecast DoorDash vs. In-Store Price Inflation

This question evaluates a candidate's competency in statistical analysis, time-series forecasting, variance estimation, and sampling design for comparing platform versus in-store price inflation across matched merchant–item pairs.

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Question

Scenario

You are asked to compare price inflation on the DoorDash platform versus in-store menu prices over time for the same merchants and items. The goal is to:

Quantify the inflation difference between platform and in-store prices.
Monitor it over time with statistical confidence.
Build a forecasting model for future differences.
Determine the required sample size and confidence intervals when no A/B test is possible.

Assume you have access to transaction-level platform data and periodic in-store (offline) price observations for the same merchant–item pairs.

Task

Describe, in detail, how you would:

Collect and clean data to make an apples-to-apples comparison.
Construct and monitor an inflation metric that captures the platform-versus-in-store differential over time.
Build a forecasting model for this differential.
Estimate variance and confidence intervals, and determine sample size/minimum detectable effect (MDE) without an A/B test.

Include guidance on: data collection, time-series analysis, variance estimation, confidence intervals, and MDE.

Quantify and Forecast DoorDash vs. In-Store Price Inflation

Scenario

Task

Solution

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