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Refining margin of a coastal refinery in India

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 refinery in India (fictional) has capacity of 200,000 barrels per day and runs at 90 percent utilization. Crude costs USD 75 per barrel. Each barrel yields 45 percent gasoline worth USD 90 per barrel, 35 percent diesel worth USD 100, and 20 percent fuel oil worth USD 60. Operating costs are USD 5 per barrel. What is the net margin per barrel and the yearly profit before tax, in USD million?

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.

  • Yearly profit = barrels processed x (product basket value minus crude cost minus operating cost)
    • Basket value = sum of yield x product price
    • Gross margin = basket value minus crude
    • Net margin = gross margin minus operating cost
    • Barrels processed = capacity x utilization x 365

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.

  1. Step 1: Basket value

    What a strong candidate does: Weight each product price by its yield.

    Basket value (USD per barrel): 0.45 × 90 + 0.35 × 100 + 0.2 × 60 = 87.5

  2. Step 2: Gross margin

    What a strong candidate does: Basket value minus the crude price.

    Gross margin (USD per barrel): 87.5 - 75 = 12.5

  3. Step 3: Net margin

    What a strong candidate does: Subtract operating costs of USD 5.

    Net margin (USD per barrel): 12.5 - 5 = 7.5

  4. Step 4: Yearly profit

    What a strong candidate does: 200,000 barrels a day at 90 percent for 365 days, times 7.5 dollars.

    Yearly profit before tax (USD million): 200,000 × 365 × 0.9 × 7.5 ÷ 1,000,000 = 493

The recommendation to listen for

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

The refinery should focus on yields, crude choice and uptime, because it earns only about USD 7.5 per barrel, about USD 493 million a year. First, the product basket is worth USD 87.5 per barrel against USD 75 of crude, a gross margin of USD 12.5. Second, operating costs take USD 5 of that, so making more diesel at USD 100 and less fuel oil at USD 60 is the biggest lever. The risk is that crude prices rise faster than product prices. As a next step, test which cheaper crudes the refinery can handle.

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.