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Easy Make vs. Buy Breakeven Analysis Consumer Decision

Purchasing Your Coffee Maker

#Real Life, Retail #Real Life #Retail
ProHub Comment

This is an introductory case designed to teach candidates how to structure a personal consumer decision using consulting frameworks. The case combines qualitative analysis (Make vs. Buy framework with Costs, Benefits, and Risks) with a straightforward quantitative breakeven calculation, making it ideal for teaching how to synthesize different analytical approaches in a practical, relatable scenario.

Estimated Time 15 minutes
Difficulty Easy
Source Pennsylvania
50 / 100
Your friend, Matt, is considering buying a coffee maker. He has a $200 maximum budget but as a new Penn grad, he would be happy to spend less than that. He has retained your consulting skills to help him make this decision.

Clarifying Information

  1. Matt will be an investment banking analyst and has heard rumors of long hours and late nights. He feels that he will need the caffeine to get through the dreaded first year.
  2. Matt’s maximum budget is $200. Thus, many of the fancy, barista style coffee makers are out of his budget.
  3. Matt hopes to be able to make standard, drip cups of coffee with his coffee maker. He will occasionally order a Latte.
  4. After graduation, Matt’s mom gave him a coupon to Bed Bath & Beyond. Using her 20% off coupon, Matt could purchase a Keurig for $100.
  5. Cost of Keurig: $100
  6. Cost of Daily K-Cup, Milk & Splenda: $1
  7. Cost of Daily Starbucks Coffee: $3
  8. Matt drinks 5 coffees per week