Operation Interview Questions | Glassdoor

# Operation Interview Questions

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### Operations Analyst at Capital One was asked...

Jan 13, 2010
 You have the choice between using first class or third class mail for a letter you are sending out to potential customers. First class costs \$0.50 per piece and reach 100% of potential customers. Third class costs \$0.40 per piece and reaches 80% of potential customers. Which do you use?11 AnswersIt provokes you to ask questions. You do not nearly have enough information to perform the analysis. You need to know the present value of each customer, how many mailings, and calculate the point of indifference in terms of how many letters you are sending, etc.First class should be used, as the cost of each delivered letter will be the same, but you will reach all of your intended audience. Example: 1000 pieces to be sent, sending first class costs \$500 and reaches 1000 (\$.50 per peice), and sending second class costs \$400 and reaches 800 (\$.50 per piece)either one is good. For example, you will reach 0.8 person by spending \$0.4. If divided 0.4 by 0.8, we get that we will reach 1 person by spending \$0.5. So two methods have the same effect.Show More ResponsesNeed to know the Revenue per customer and no of customers before we can decide on either@gaurav: don't make it too complicated. they just want to know the costs of reaching the customers. peppermint is right.peppermint is not right. say you make 1000 dollars off of each customer you reach at probability .5. Assuming you send 1000 letters, first class reaches all 1000 and has total cost 500 dollars. revenue is (1000 customers reached)(.5 prob make 1000 dollars)(1000 dollars) = 500,000 and profit is 500,000-500 = 499,500. third class costs 400 dollars, reaches 800 people, gives revenue of (800)(.5)(1000)= 400,000, profit is 400,000-400=399,600. You can generalize this to a formula to determine which is better given number of letters to be sent, expected money off of customers who accept, and probability that the customers letters reach will accept.Peppermint is right. Assumption: only when the letter has reached the recipient, he becomes a potential customer. Say they send letters to x people So, Cost per Potential Customer= 0.5/x and 0.4/(0.8x) for respective cases So, cost per potential customer is same in both cases.I believe that the point of cost is moot; what is the content of the letter and how imperative is it that it be delivered to the potential customer? If it is vital, go for 100% success rate. If it is vital and digital copies can be provided, then go for a scanned copy. Digital signature documents also work. I know most prospects yield their info to cold callers. Why do math when you can just use logic?The real answer is.... Send the letter through 1st class mail if the price of the product capital one is trying to sell is above \$0.90. If not, send the letter through 3rd class mail. Assumptions:- •Potentially customers = actual customers Sample calculation:- Profit = Revenue - Cost Assume all potential customers = 100 Assume Price = \$1 1st class mail profit = (\$1x100)-(\$0.5x100) = \$50 3rd class mail profit = (\$1x80)-(\$0.4x80) = \$48 Assume Price = \$0.80 1st class mail profit = (\$0.8x100)-(\$0.5x100) = \$30 3rd class mail profit = (\$0.8x80)-(\$0.4x80) = \$32 Assume Price = \$0.90 1st class mail profit = (\$0.9x100)-(\$0.5x100) = \$40 3rd class mail profit = (\$0.9x80)-(\$0.4x80) = \$40Must also consider response of 3rd class versus 1st class-perceptioncost per reached customer is the same in both cases - 50cents (.5/100 or .4/80) however you have to send more letters with 3rd mail to reach the same number of customers. There is a cost associated with printing and handling letters then you'd use 1st class.

### Operations Analyst at Capital One was asked...

Oct 10, 2011
 What are the number of new customers needed in order to break even?7 Answers8,000@ Interview Candidate : How did you even get to 8000? Did you know what was the profit per new applicant?Can you please explain your question in more detail? Thanks in advanceShow More ResponsesIt's over 9000!Can you please explain how you calculated the breakeven to be 8000 or 9000??are you all guessing??!! rev: fees + interest + charge, all dependent on # of customers cost: cash back+bad debt+capital cost, dependent on # of customers; system & operation+other fixed cost, independent you only have a credit limit, what can you do??My knee-jerk first answer is "How much did you lose in terms of customer revenue? It isn't a question of how many customers you've lost, but of P+L."

Aug 10, 2013

Aug 19, 2013