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Medium Growth Strategy Operations

Snow Big Deal

#Transportation
ProHub Comment

This case tests cost-benefit analysis and capacity planning under constraints. It requires candidates to compare two strategic options (raise rental rates vs. purchase equipment), perform break-even analysis, and consider both financial metrics and operational risks. The case teaches practical decision-making in procurement and vendor management.

Estimated Time 26 minutes
Difficulty Medium
Source Tuck
37 / 100
Our client is the New Hampshire Department of Transportation (NH DOT), a state government entity that strives to provide “safe and secure mobility and travel options for all of the state’s residents, visitors and goods movement.” Managing snowfall is a major responsibility of NH DOT. Every year, they rent privately-owned equipment to plow the roads. NH DOT is currently negotiating plow contracts for 2023 but is facing a shortage in equipment to rent. This is resulting in an increase in projected response time and in number of anticipated “beats” covered by each truck. The DOT have hired our firm to help address this issue and to plan for the years to come.

Clarifying Information

  1. Preliminary estimates indicate that there will be 300 machines available this season.
  2. NH DOT do not currently own any plows
  3. Plow rental fee includes labor costs. Rental fees are negotiated each season.
  4. Responsible for NH and NH routes into neighboring states
  5. Beat = Unique Route that needs to be plowed
  6. Response Time = Time needed to completely plow a beat
  7. NH Rents 3 classes of snowplows that differ in size and specifications (Assume all snowplows are the same for the purpose of this case)
Mock Interview
Interviewer

Our client is the New Hampshire Department of Transportation (NH DOT), a state government entity that strives to provide "safe and secure mobility and travel options for all of the state's residents, visitors and goods movement." Managing snowfall is a major responsibility of NH DOT. Every year, they rent privately-owned equipment to plow the roads. NH DOT is currently negotiating plow contracts for 2023 but is facing a shortage in equipment to rent. This is resulting in an increase in projected response time and in number of anticipated "beats" covered by each truck. The DOT have hired our firm to help address this issue and to plan for the years to come.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
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NH DOT needs 100 additional snowplow machines to handle a forecasted 120-inch snowfall season (requiring 400 total machines vs. 300 available). The case requires analyzing two options: increasing rental rates by 10% to attract 100 additional rentals ($7,000/hour incremental cost) versus purchasing 100 new vehicles ($8,000/hour incremental cost). The recommendation favors the rental option while exploring sensitivity through a 15% breakeven analysis.

Key Insights:

  1. Market sizing: Calculate total capacity need (120 inches × 1,000 hours/inch ÷ 300 hours/machine = 400 machines needed)
  2. Cost comparison requires hourly depreciation, variable costs, and labor allocation for purchase option versus simple incremental rental cost for existing fleet plus new rentals
  3. Break-even analysis reveals the sensitivity of supply projections to price increases (15% vs. 10% target)
  4. Operational flexibility and supply chain relationships are differentiators beyond pure financial calculations