Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview
Anonymous A
on Nov 27, 2019
Global
Question about

What are the real savings?

The case gives these numbers:

  1. Old costs with low price per napkin: 128.8M
  2. New costs with low price per napkin: 51.5M
  3. New costs with high price per napkin: 103.0M
  4. Number of dispensers is 120,000

To calculate the savings, the case suggests that it is 1.-2. = 77.3M

To calculate breakeven, the case suggests that the difference in the costs is 1.-3. divided by 4. to get the maximum price for a dispenser. 

The real savings should be 1-3 and not 1-2 or am I wrong? To me, it did not make sense to calculate the new costs with the old napkin price since the difference between the two solutions is only 25.8M and not 77.3. 

(One may think we could just divide the 77.3 by two because the price is twice as much, however this is a mistake because we are talking about savings and not actual costs. Hence, the difference between the 77.3 - 25.8 is higher than 77.3 divided by 2.)

1
2.4k
20
Be the first to answer!
Nobody has responded to this question yet.
Top answer
on Nov 27, 2019
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi,
you are right. In fact, in the breakeven calculation, it considers the correct saving. The error is even in the timing of releasing the data about cost of new napkin: it reveals it costs 1cent only after have found the saving

Best,
Antonello

on Jan 14, 2020
agree on that, quite a hassle to calculate the napkin consumption all over again and use the new price...
Similar Questions
Consulting
Has anyone tried any of the AI Interview Tools for MBB before?
on Mar 25, 2025
Global
10
11.4k
Top answer by
Iman
Coach
Systemiq | Ex-BCG | 10 years experience with 8+ specialising in sustainability | Free Intro | Ex-PrepLounge candidate
344
10 Answers
11.4k Views
+7
Consulting
McKinsey PEI
7 hrs ago
Global
7
1.6k
Top answer by
Deleted user
57
7 Answers
1.6k Views
+4
Consulting
BCG First Round Behavioral
on Mar 24, 2025
Global
6
2.1k
Top answer by
Lorenzo
Coach
IESE MBA | Bain&Co | OC&C | Private Equity | Consumer Goods
70
6 Answers
2.1k Views
+3
How likely are you to recommend us to a friend or fellow student?
0 = Not likely
10 = Very likely
Thanks for your feedback! Your opinion helps us make PrepLounge even better.