To Automate or Not
Practice this intermediate operations case interview question in the Transportation sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
ProHub Comment
This case tests candidate ability to conduct financial analysis on a capital investment decision while also evaluating strategic judgment about a CEO's decision-making motivations. The case requires candidates to map the distribution process, quantify labor costs, calculate break-even analysis, and ultimately recommend whether to automate based on financial merits rather than the CEO's enthusiasm for innovation.
Estimated Time
26 minutes
Difficulty
Medium
Source
Darden
10
/ 100
After returning from a trade show, the CEO of a large grocery distribution center calls you. He enthusiastically describes a new technology which could be used to automate part of his company’s process. He asks whether you think this would be a good idea for his business. Knowing that this CEO is a tech-enthusiast who loves innovation for the novelty of it, you ponder the implications. How would you tackle this problem?
Clarifying Information
- The company does not have a specific goal in mind with this decision. This CEO trusts us and will do whatever we advise. This is to test the candidate’s business judgment.
- Shipments are made to roughly 50 grocery stores in the immediate area, and the company does 1M shipments per year
- Costs to automate – (1) one-time outlay of $4M, plus (2) recurring OH, training, and additional maintenance costs of $1.0M (make the candidate request BOTH pieces of info)
- The candidate should visualize the distribution process (i.e. receiving, holding & picking, shipping) to think through this question