Free BCG Potential Test

March 26, 2018 | Author: Ken | Category: Financial Transaction, Sales, Debit Card, Prices, Credit Card


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   Boston Consulting Group Potential Test Free Practice Test   igotanoffer.com     Free BCG Potential Test   Copyright © 2015 IGotAnOffer Ltd. 0 points for no answer and -1 point for a wrong answer. During your recruiting process with BCG you will have to go through an online case. You should select one or more answers for each question. The purpose of this exercise is to test your analytical and logic skills as well as your business sense. you will find the information you need to answer the question No calculator. you will find the question itself •  on the right. Scoring system.Candidate briefing Online case. Sample. During the actual test you will be able to move onwards and backwards and change your prior answers so you should feel free to do the same here. This document is a sample of 10 questions put together by IGotAnOffer. Each question is divided into 2 parts: •  on the left. For each right answer you will get +3 points. Copyright © 2015 IGotAnOffer Ltd. Its purpose is to help you prepare for the actual online exercise you will have to complete. . We recommend you take no more than 20 minutes to take this test. We recommend you complete this sample test without using a calculator. However. •  Maths vs. You can contact us at [email protected] Despite these uncertainties we believe the materials we put together will enable you to develop the right skills. . Remaining uncertainties. Although this free sample test is unlikely to be a perfect representation of the actual test. Future improvements. Copyright © 2015 IGotAnOffer Ltd. BCG only makes four questions available to candidates preparing for its online test. The free sample test you are reading is inspired by these questions as well as conversations with past BCG candidates and other consulting recruitment tests. the balance of maths and logic questions in the actual test is not known at this stage. logic questions: Given the limited number of questions made available by BCG.IGotAnOffer disclaimer Process followed. Your feedback on the actual test would be very valuable to us and would significantly help us further improve these materials. past candidates have also reported slightly varying numbers of questions and time limits. There are a few uncertainties regarding the BCG potential test that you should be aware of: •  Number of questions and time: In its four-question sample BCG mentions that the online test includes 23 questions and needs to be completed in 45 minutes. we believe it should help significantly in your preparation.com.   €102 €136 €125 €116 Doc 1 Doc 2 Doc 3 Doc 4 Pricing strategy Case Overview Market Research Due to the increasing number of low-cost airlines entering the market.500 €150 Copyright © 2015 IGotAnOffer Ltd. Number of respondents and price points: €200 1. it decided to carry out market research to find out how much passengers would be willing to pay for different routes.  4.000 people were asked how much they would pay for a flight from London to Paris. €50 500 .  2. the world’s major carriers are forced to revisit their pricing strategies in order to preserve their market share.100 In order to do so. Olympian Airways is one of the largest airlines in Europe and is revamping its Question x / for 23international shortpricing strategy haul flights. €100 1. 5.BCG Potential Test – Olympian Airways Question 1 Based on the market research.  3. what is the average ticket price Olympian Airways should charge for a flight from London to Paris? 1.   4. passengers during flights.BCG Potential Test – Olympian Airways Question 2 What ticket price should Olympian Airways charge to maximise gross profit per day? 1. C2 and C3. C1 customers are price elastic across ticket prices and likely to spend less on goods purchased on board. Question x / 23 electronics.000 30 20 Ticket price €100 €150 # passengers / flight 200 150 # flights / day Distribution of passengers C1 50% 30% C2 30% 30% C3 20% 40% Avg duty free spending per passenger C1 €5 C2 €10 C3 €15 . Olympian Airways’ aircrafts all have the same number of seats.) to alcoholic beverages.000 €15. Copyright © 2015 IGotAnOffer Ltd.  3. Olympian Airways also sells products (perfumes. Scenario A is a low price high volume strategy and Scenario B is a high price low volume strategy. C1 passengers have got the lowest income and C3 the highest.  €100 €125 €150 None of the above / we lack sufficient information at this stage Doc 1 Doc 2 Doc 3 Maximise gross profit Customer segments After conducting market research in ticket prices the company puts together two different scenarios. In addition to ticket revenues.  2. The company classifies customers into three income bands: C1. etc. Doc 4 Scenario analysis Scenario A B Flight cost and tickets’ revenue Avg cost per flight €15. C2 and C3.000 €15. Copyright © 2015 IGotAnOffer Ltd. Olympian Airways also sells products (perfumes.  4.000 30 20 Ticket price €100 €150 # passengers / flight 200 150 # flights / day Distribution of passengers C1 50% 30% C2 30% 30% C3 20% 40% Avg duty free spending per passenger C1 €5 C2 €10 C3 €15 . In addition to ticket revenues. Olympian Airways’ aircrafts all have the same number of seats.  2.BCG Potential Test – Olympian Airways Question 3 Which of the factors listed below would not affect the gross profit difference between scenarios A and B? 1. Doc 4 Scenario analysis Scenario A B Flight cost and tickets’ revenue Avg cost per flight €15. etc. C1 customers are price elastic across ticket prices and likely to spend less on goods purchased on board. passengers during flights.) to alcoholic beverages. Scenario A is a low price high volume strategy and Scenario B is a high price low volume strategy. C1 passengers have got the lowest income and C3 the highest.  Ticket prices Aircrafts’ seat capacity Fuel costs None of the above Doc 1 Doc 2 Doc 3 Maximise gross profit Customer segments After conducting market research in ticket prices the company puts together two different scenarios. The company classifies customers into three income bands: C1. Question x / 23 electronics.  3. the destination and the season.  3.230 Doc 1 Doc 2 Doc 3 New customer loyalty programme Miles & Bonus In addition to reviewing its pricing strategy. what is the maximum number of points one can earn by buying a single ticket? 1.700 62. In this programme customers are awarded points based on the distance they travel with either the airline or one of Question its partners.000 points awarded per ticket.BCG Potential Test – Olympian Airways Question 4 Given the data you are provided with. .300 5.  59.  2.970 6. 3 travel classes and 2 seasons) with an average of 2.  4. None of these tickets earns less than 500 points and exactly 15 of them earn less than 1. peak season business tickets in non-popular destinations are awarded the most points. Copyright © 2015 IGotAnOffer Ltd.e.x / 23 The points earned vary depending on the travel class (i. For instance. business or economy).200 points. first. Doc 4 Data There are 60 different types of tickets (10 destinations. Olympian Airways has also decided to launch a new loyalty programme called Miles & Bonus.   4.048 €56. Copyright © 2015 IGotAnOffer Ltd. The ratio of first class.  3.160 Doc 1 Doc 2 Doc 3 Upgraded fleet of aircrafts New aircrafts Data Olympian Airways is considering upgrading its fleet.480 €56. The average duration of these flights is 3 hours. The new aircrafts will use technologies such as touch screens and Wi-Fi on board.  €56. . Doc 4 First and business customers get free WiFi on board but economy customers need to pay €2 / hour for using it. Average ticket prices for popular destinations are expected to be €700 for first class. €300 for business and €150 for economy.016 €56.  2.BCG Potential Test – Olympian Airways Question 5 Assuming only 5% of economy customers use Wi-Fi all the time. what are the expected revenues from a flight to a popular destination using a new aircraft at its full capacity? 1. The company has decided that the new aircrafts will have three different types of seats: first. business and economy. business seats will have leather seats with extra leg space and economy seats will have standard seats. Question x / 23 First class seats will have leather heated chair beds. business and economy seats in the new aircrafts will be 1 to 3 to 8 and the total number of seats will be 240. etc. apparel shops. bars. The average conversion rate from lead to actual customer is about 10%. PayCo’s clients are shops such as restaurants.  2. .  4. Share of total mix of leads (%) Question x rents / 23 debit and credit card The company Alma Bank $5 30% machines to its clients.  $39 / sale $44 / sale $49 / sale $54 / sale Doc 1 Doc 2 Doc 3 Doc 4 Cost per sale Case overview PayCo is a payments company that processes debit card and credit card transactions in the United States.BCG Potential Test – PayCo Question 6 What is the current cost per sale for PayCo assuming all lead sources have the same conversion rate? 1. Cost per lead ($) It then calls the leads to try and sell them card machines and services. Bingo Bank and Com Bank. petrol stations. Current situation PayCo purchases lists of leads at different prices from Alma Bank. supermarkets. Copyright © 2015 IGotAnOffer Ltd. It earns a rental fee for the card machines as well as a small fee for each card transaction processed by their client.  3. It purchases lists of businesses from them and calls them to sell card machines and services. Bingo Bank $3 60% Com Bank $6 10% The company works with banks to acquire new clients. Copyright © 2015 IGotAnOffer Ltd.000 Com Bank 15% 80. .3% Doc 4 Alma Bank is a large commercial bank from the East Coast of the US.  4. PayCo needs to achieve its sales target by using 300. Conversion rate results After carrying out some research.2% 11.000 Bingo Bank 8% 600.8% 12.5% 11.000 and primarily serves Mom and Pop businesses. your team finds out that the conversion rate between the three banks is actually different.  3. Its clients are mainly restaurants and shops.  2.BCG Potential Test – PayCo Question 7 What is the maximum conversion rate that can be achieved by PayCo using the the three banks as a lead source? Doc 1 Doc 2 Doc 3 Maximise conversion rate Bank by bank analysis 1. Com Bank has got a similar list of clients to Alma Bank but is established on the West Coast of the US. Question 23 Bingo Bank x is /established in the Midwest Conversion rate # of leads available per year Alma Bank 12% 100.  10.000 leads per year. The team at PayCo has always assumed a similar conversion rate of 10% across all three banks. your team finds out that the conversion rate between the three banks is actually different. PayCo needs to achieve its sales target by using 300. Question 23 Bingo Bank x is /established in the Midwest Conversion rate # of leads available per year Alma Bank 12% 100.  4.BCG Potential Test – PayCo Question 8 What is the minimum cost per sale PayCo can achieve by using Alma Bank. . Copyright © 2015 IGotAnOffer Ltd. Bingo Bank and Com Bank as sources of leads? Doc 1 Doc 2 Doc 3 Maximise conversion rate Bank by bank analysis 1.000 Bingo Bank 8% 600.5 / sale $40.  $35. Its clients are mainly restaurants and shops.000 leads per year.  2.000 and primarily serves Mom and Pop businesses. Com Bank has got a similar list of clients to Alma Bank but is established on the West Coast of the US.000 Com Bank 15% 80. Conversion rate results After carrying out some research.0 / sale None of the above / we lack sufficient information at this stage Doc 4 Alma Bank is a large commercial bank from the East Coast of the US.0 / sale $37.  3. The team at PayCo has always assumed a similar conversion rate of 10% across all three banks. his initial conclusion is that they have been consistently making less sales and getting lower bonuses than their peers. Sellers are divided into three teams. The list of leads they get are newly setup businesses which are likely to require debit and credit card payment processing services. leads from their respective bank and work through the list during the day.  4. Copyright © 2015 IGotAnOffer Ltd. Doc 4 .  Work with Bingo Bank to increase the quality of the leads purchased from them by PayCo Group sellers handling different banks in a single team and randomise the distribution of leads between them Keep sellers in different teams but rotate lead sources between them Increase bonuses to $200 per sale for all sellers PayCo’s sellers work from 9am to 5pm from Monday to Friday 47 weeks a year. After investigating.  3. sellers Sellers’ compensation The sellers’ base salary starts at $40k and increases by about 5% per year for each additional year they stay with the company. Bingo Bank and Com Bank. Sellers simply cold-call the leads and try to convince them to sign up for PayCo services. Question x / 23receive a list of 85 Every day. sellers can receive $100 for each sale they make. Each team deals with one of the following lead sources: Alma Bank. The Head of Sales has noticed that sellers for Bingo Bank are much less motivated than their peers on average. In addition.  2.BCG Potential Test – PayCo Question 9 Which of the following statements would NOT increase the motivation of sellers handling leads from Bingo Bank? Doc 1 Doc 2 Doc 3 Sellers incentives Day to day 1. sellers have been found to sell PayCo’s services at increasingly less profitable prices. .5%. if PayCo processes a debit card transaction for a sandwich at $5. Question x / 23 The head of sales suspects that this might be due to sellers selling at increasingly lower prices to increase their bonus. Copyright © 2015 IGotAnOffer Ltd. The head of finance of the group has noticed that the prices at which sellers agreed to provide PayCo’s services have decreased in the past few months. Lately. For instance.BCG Potential Test – PayCo Question 10 Which of the following measures would best help the company to fully prevent sellers from agreeing unprofitable prices with future customers? 1. When selling PayCo’s services.  3. they usually agree a price of about 15 cents per future transaction processed for the client. the price agreed is a percentage of the transaction instead of a fixed fee. This percentage is usually around 1. For debit cards. sellers negotiate a share of their customers’ future revenue. they will receive 15 cents from the sandwich shop in exchange for their service.  2.  4. For credit cards.  Train sellers to negotiate better prices with leads Fine sellers when they give unprofitable prices Incentivise sellers to sell at higher prices with a different bonus system Set up an audit team that would check prices and validate contracts before they count towards sellers’ total sales Doc 1 Doc 2 Doc 3 Doc 4 Incentive structure Current issue Pricing Sellers are currently only incentivised based on the number of customers they manage to sell to. 575 – €15.  Calculate the weighted average by multiplying the prices by the number of people per price segment and then dividing by 5.000) x 20 = €181.1.900 x 150 + 1. Copyright © 2015 IGotAnOffer Ltd.000) x 30 = €201.500 x 100 + 1.700 -  Gross profit per day: (Total Revenues – Cost per Flight) x Number of Flights per Day = (€20.000: (500 x 50 + 1.900 2.500 Scenario A maximises gross profit per day. The gross profit for each scenario can be calculated as follows: Answer 2 is therefore the correct answer. answer 1 (€100) is the correct answer.1.700 – €15.100 x 200) / 5.Answer key Question 1 Question 2 Correct answer: 2 Correct answer: 1 The ticket price can be calculated as follows: 1.500 = 1.100 .500 + €1.500 -  Revenues from duty free: (30% x €5 + 30% x €10 + 40% x €15) x 150 = €1. .500 .  Calculate the number of respondents for the €150 price segment: 5.575 -  Gross profit per day: (Total Revenues – Cost per Flight) x Number of Flights per Day = €22.000 .000 Scenario B: -  Revenues from tickets: €150 x 150 = €22.000 = €136 You are asked to determine which of the two scenarios maximises gross profit.000 -  Revenues from duty free: (50% x €5 + 30% x €10 + 20% x €15) x 200 = €1. Scenario A: -  Revenues from tickets: €100 x 200 = €20.000 + €1. Therefore. Answer key Question 3 Question 4 Correct answer: 4 Correct answer: 1 Ticket prices will affect revenues for each scenario and will therefore affect the gross profit difference between them.000. and since the number of flights is different for each scenario. there are 120.000 – (15 x 500) – (44 x 1.700 points for the remaining ticket. we can have 15 tickets with 500 points. this will affect the gross profit difference as well. The total number of seats per aircraft could affect the gross profit difference.000 points each. Therefore. if it was 300 then the number of passengers per flight and the number of flights per day for scenario A might increase.200 points. At a minimum. the points of all the other types of tickets need to be minimised. . The correct answer is therefore answer 1. all of the factors listed could affect the difference in gross profit. Therefore. There are 60 different types of tickets with an average of 2. hence answer 4 is correct. In order to maximise the points of one ticket the remaining 44 should carry 1. Fuel costs will affect the cost of the flight. Copyright © 2015 IGotAnOffer Ltd. out of the 120.000 points. The total number of points from all types of tickets is therefore 60 x 2.200 points each. None of the tickets have less than 500 points and exactly 15 have less than 1.200) = 59. Notice that you are asked to identify which factors would NOT affect the difference in gross profit. In order to find the maximum number of points that could be earned with a single type of ticket.200 points. This leaves 44 tickets (60-15-1) with more than 1.000 = 120. For example. Therefore total revenues are €56. taking into account their total share of mix: $5 x 30% + $3 x 60% + $6 x 10% = $3.0. Copyright © 2015 IGotAnOffer Ltd. You should then notice that ticket revenues can only contribute towards the tens of the hundreds in the result.  Calculate cost per sale The cost per lead needs to be calculated across all three banks.048. By doing this. Calculate the revenues from Wi-Fi purchases: 5% x 160 x €2 x 3 = €48 This calculation can be broken down into two steps: 1.000 3.9 / 10% = $39.  Calculate cost per lead 2. The right answer will therefore finish by 8.  Calculate the number of passengers per category 1y + 3y + 8y = 240 => 12y = 240 => y = 20: First class passengers: 20 Business class passengers: 60 Economy class passengers: 160 2. .9 / lead The cost per sale can be calculated by dividing the cost per lead by the conversion rate: $3.Answer key Question 5 Question 6 Correct answer: 1 Correct answer: 1 The expected revenues can be calculated as follows: 1. Calculate the revenues from tickets: 20 x €700 + 60 x €300 + 160 x €150 = €56. A faster way to obtain the correct answer is to calculate the revenues from Wi-Fi first (€48). The correct answer is therefore answer 1. all answers can be eliminated except number 1.   Bingo bank: 120. The correct answer is therefore answer 2.7 2.0 Bingo bank has got the lowest cost per sale. To maximise the conversion rate. 100.000 leads available 2.  Bingo bank: $3 per lead with a 8% conversion 3.Answer key Question 7 Question 8 Correct answer: 2 Correct answer: 2 In order to maximise its conversion rate.000 leads available Sufficient information is provided to calculate the cost of sale for each lead source: 1. Copyright © 2015 IGotAnOffer Ltd.000) / 300.  Com bank: $6 per lead with a 15% conversion PayCo needs 300. In addition.  Com bank: 80. It should then use as many leads from the first source before considering the second one: 1. the cost per sale can be calculated by dividing the cost per lead by the conversion rate: 1.5 3. 600.  Alma bank: 100. For each bank. PayCo needs to rank lead sources from the highest to the lowest conversion rates. 80.  Alma bank: $5 / 12% = $41.000 + 8% x 120.  Alma bank: $5 per lead with a 12% conversion 2.000 The maximum conversion rate achievable is then: (15% x 80.000 leads per year to meet its target sales.  Com bank: $6 / 15% = $40.000 2.000 3. it can provide 600.2% The correct answer is therefore answer 2.000.000 = 11. the lead mix should then be: 1.000 + 12% x 100.  Bingo bank 8%.000 leads available 3. .  Com bank 15%.000 leads per year which is sufficient to cover PayCo’s needs of 300.  Bingo bank: $3 / 8% = $37.  Alma bank 12%. if bonuses increase to $200 per sale for all sellers.  Giving a fine to sellers. . the conversion rate for leads from Bingo Bank is lower than that of other banks. while a good incentive. However. The comment implies that. the relative bonus obtained by sellers focused on Bingo Bank will not increase. Copyright © 2015 IGotAnOffer Ltd. However.Answer key Question 9 Question 10 Correct answer: 4 Correct answer: 4 The head of sales’ initial conclusion is that sellers handling Bingo Bank leads “have been consistently making less sales and getting lower bonuses than their peers”. 2. Answers 1 to 3 would all help decrease sellers’ tendency to sell at unprofitable prices. is not guaranteed to fully stop the trend. to increase sellers’ satisfaction. none of them would completely stop the trend: 1. Indeed. 3.  Training sellers to give better prices could still result in sellers giving unprofitable prices in practice. their bonus would need to be similar relative to their peers. Answer 4 is the correct answer because it fully prevents sellers from selling at unprofitable prices via an external audit team.  Similarly. Answer 4 would therefore not help solve the problem and is the correct answer. setting up a better incentives scheme is also not guaranteed to halt the trend.
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