Interviewer view · keep this screen to yourself

How much of the profit comes from the installed base?

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.

Ironfield Machines (a fictional company) sells 1,000 mining trucks a year at USD 250,000 each, with a 10 percent operating margin. It has 10,000 of its trucks working at customers. Each truck needs about USD 20,000 a year of parts and service, and Ironfield wins 60 percent of that spending at a 35 percent margin. How much profit comes from new trucks and from the aftermarket?

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.

Profit = new equipment profit + aftermarket profit
- New equipment profit = units x price x margin
- Aftermarket revenue = installed base x spend per unit x capture rate
- Aftermarket profit = aftermarket revenue x margin

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: New truck revenue
What a strong candidate does: 1,000 trucks at USD 250,000.
New equipment revenue (USD million): 1,000 × 250,000 ÷ 1,000,000 = 250
Step 2: New truck profit
What a strong candidate does: 10 percent margin.
New equipment profit (USD million): 250 × 0.1 = 25
Step 3: Aftermarket revenue
What a strong candidate does: 10,000 trucks, USD 20,000 each, 60 percent captured.
Aftermarket revenue (USD million): 10,000 × 20,000 × 0.6 ÷ 1,000,000 = 120
Step 4: Aftermarket profit
What a strong candidate does: 35 percent margin.
Aftermarket profit (USD million): 120 × 0.35 = 42
Step 5: Share of profit from the aftermarket
What a strong candidate does: 42 out of a total of 67.
Aftermarket share of profit (fraction): 42 ÷ (25 + 42) = 0.6269

The recommendation to listen for

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

Ironfield should invest in its aftermarket, because it is about a third of revenue but about 63 percent of profit. First, the aftermarket earns USD 42 million on USD 120 million of revenue, against USD 25 million from new trucks. Second, raising the capture rate from 60 to 70 percent would add USD 20 million of revenue and USD 7 million of profit. The risk is that customers switch to cheaper independent parts suppliers. As a next step, sell service contracts with each new truck and track the capture rate by region.

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.