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McKinsey & Company Senior Associate Interview Question

I interviewed in Chicago, IL and was asked:
"Estimate size of vehicles fleet in a large city"
Tags: business problem
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Part of a Senior Associate Interview Review - one of 724 McKinsey & Company Interview Reviews

Answers & Comments

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Tried to approach problem using bottom-up reasoning
- Interview Candidate on Jul 26, 2009 Flag Response
of 2
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 you break a problem down.
- Anonymous on Jan 17, 2010 Flag Response
of 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 Flag Response

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