Interview Question

Senior Associate Interview Chicago, IL

Estimate size of vehicles fleet in a large city

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business problem
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Interview Answer

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Tried to approach problem using bottom-up reasoning

Interview Candidate on Jul 26, 2009
1

This is a simple market-sizing question. Therefore you need to make assumptions on the numbers, for example...
Assume large city = 5 million people
Assume 60% own a car, the rest use public transport = 3 million people
Assume 50% of these people work in an office = 1.5 million people
Assume 10% of these people are middle to top mgt = 150K people
Therefore size of the vehicles fleet in a large city = 3% of population of the city
This is an example of how it can be done. They are not looking for the exact number! They won't to know how you think...how you break a problem down.

Anonymous on Jan 17, 2010
1

"Define" large city to mean 10 million people+, but assume 10 million to keep the math feasible
Assume that those living under the poverty line cannot afford cars - this takes 30% or 3 million people out of the running
Out of the remaining 7 million people, assume that 30% are under 18 and another 20% are over 65 and thus are unlikely to drive a car themselves
This leaves a potential car-owning population of 3.5 Million people
Assume that there are 2 types of cities - ones with great public transport (e.g., NYC, San Francisco) and others with poor public transport (e.g., Dallas)
In the former, only about 20% of the potential car-owning population is likely to hassle with owning a car, but in the latter 70% of the potential owners may opt for a car.
Thus the range of cars that I'd expect to see in a city of 10 million is somewhere between 700K and 2.45M.
Oh and by the way, I am assuming that this is a city with enough infrastructure (e.g., roads, parking, gas stations) to support cars for this many people.

The Numerical One on Jul 12, 2010

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