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Cost per kilogram: an expendable rocket versus a reusable one

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

A launch company compares two versions of its rocket and reports in USD. Expendable: a first stage costing USD 40 million, an upper stage costing USD 10 million, and USD 10 million for the nose cone, fuel and launch operations; it carries 20,000 kg. Reusable: the first stage costs USD 50 million to build (it needs landing legs and more engineering) and flies 20 times, each flight needs USD 1.5 million of recovery and refurbishment, the upper stage and the other costs are the same, and it carries 15,000 kg because it keeps fuel for landing. What is the cost per launch and per kilogram of each, and how many flights must the reusable stage make to beat the expendable one per kilogram? (Figures are illustrative.)

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Cost per kg = cost per launch / payload
- Expendable: every part is new each time
- Reusable: first stage cost / number of flights + refurbishment + upper stage + operations
- Break-even flights: when the reusable cost per kg equals the expendable one

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Expendable cost per launch
What a strong candidate does: USD 40 million plus 10 plus 10, in USD millions.
Expendable cost per launch (USD millions): 40 + 10 + 10 = 60
Step 2: Expendable cost per kg
What a strong candidate does: USD 60 million divided by 20,000 kg.
Expendable cost per kg (USD): 60,000,000 ÷ 20,000 = 3,000
Step 3: Reusable cost per launch
What a strong candidate does: First stage share of 50 divided by 20, plus 1.5 of refurbishment, plus 10 for the upper stage and 10 of other costs.
Reusable cost per launch (USD millions): 50 ÷ 20 + 1.5 + 10 + 10 = 24
Step 4: Reusable cost per kg
What a strong candidate does: USD 24 million divided by 15,000 kg.
Reusable cost per kg (USD): 24,000,000 ÷ 15,000 = 1,600
Step 5: Flights needed to break even
What a strong candidate does: To match USD 3,000 per kg on 15,000 kg, a launch may cost up to USD 45 million. Take away the 21.5 million of costs paid every flight, which leaves 23.5 million for the first stage share: 50 divided by 23.5 is about 2.1, so the third flight already beats the expendable rocket.
Flights at which reuse breaks even: 50 ÷ (3,000 × 15,000 ÷ 1,000,000 - 1.5 - 10 - 10) = 2.13

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The company should build the reusable version if it has enough launches to fly each first stage many times, because on these numbers the cost per kilogram falls from about USD 3,000 to about USD 1,600, almost half. First, reuse spreads a USD 50 million stage over 20 flights, so it adds only USD 2.5 million per launch. Second, reuse pays for itself from about the third flight, so the real question is demand: a stage that flies twice a year gains little. The risk is that refurbishment costs more than planned or that a lost stage wipes out the saving. As a next step, check how many launches a year the company can sell, including its own satellites.

Risks a strong answer names: A failed landing loses the stage and its future flights; Refurbishment may cost more and take longer than planned; Without enough demand, stages sit idle and the saving shrinks.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.