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McKinsey & Company Consultant Interview Question (student candidate)

I interviewed in Menlo Park, CA and was asked:
"I was asked to help a hotel figure out whether or not it should continue to stock mini-bars in their hotels - did it make sense? We walked through a case study and talked about the cost of restocking, the margins on the candy bars, etc, the cost of electricity and maintenance of the fridges."
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The answer to the question requires addressing two different reasons for having a min-bar in a hotel room: (i) to generate revenue; and (ii) for customer convenience. Since one might easily assume customer convenience is a given, then the analysis needs to focus on whether the practice generates net revenues. If it does, then the postive revenues with the customer service benefit lead to an easy conclusion that the practice should continue. If however the revenue does not cover the costs, then a balancing between the costs and benefits would need to be performed. In doing so, a value would need to be ascribed to the value to the customer of the convenience this service provides, which in fact would lead one back to a determination whether the prices charged are adequate.
- Thomas on Jan 23, 2014 Flag Response

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