Case Interviews
Should I calculate total profit or profit per unit in a case?
If the interviewer gives me revenue and cost per unit, do I have to keep the analysis on a per-unit basis? I sometimes jump to total profit instead. Will the interviewer redirect me if that is the less useful route, or should I decide which calculation I need before starting?
Ian’s Answer
It completely depends on the case!
The most important thing to understand before you calculate anything is why am I calculating this?
If you need profits on a per unit basis in order to understand how good x product or x company is compared to the other options, then calculate it on a per unit basis! If you only need total profits in order to evaluate an investment, get an NPV, etc., then do that! Some cases may need both, so you need to take the "long route".
Again, first figure out what you need to calculate and why. Then, take the most direct approach to that number.
In terms of whether an interviewer will let you go the "wrong way", it depends on both them and you. Fundamentally, you need to lay out your math beforehand. If you do this, most interviewers will autocorrect you. If you don't do this, it's more likely they will let you proceed without correcting you.