McKinsey Problem Solving Test - Practice TestB

©2006APTMetrics,Inc.McKinseyProblemSolvingTestPracticeTestB1InstructionsPracticeTestOverviewandInstructionsThispracticetesthasbeendevelopedtoprovideasampleoftheactualMcKinseyProblemSolvingTestusedforselectionpurposes.Thistestassessesyourabilitytosolvebusinessproblemsusingdeductive,inductive,andquantitativereasoning.Thispracticetestcontainsatotalof26questions.Theactualtestcontains26questionsandyouwillbegiven60minutestoanswerasmanyquestionsaspossible.YouwillbepresentedwiththreescenariosbasedonactualMcKinseyclientcases.Informationrelatedtoeachscenariowillbeshownintext,tables,andexhibits.Thisinformationispresentedinshadedareasandisdistributedinsectionsthroughoutthescenario.Thequestionsaskyoutofindthemostappropriateanswertotheproblemasdescribedusingonlytheinformationpresented.Youshouldselectoneandonlyoneanswertoanyquestion.Whilecompletingthispracticetest,donotuseanyelectronicdevices(e.g.,calculator,computer)whenperformingcalculationstoanswerthequestions.Electronicdeviceswillnotbepermittedtobeusedduringtheactualtestadministration.Alsoduringtheactualtestadministration,youmayuseallblankspaceinthetestbookletasscratchpapertoassistyouinperforminganycalculationsandrecordinganynotes.Noscratchpaperwillbeallowed.Bookletswillbedestroyedafteryoucompletethetestandwillnotbeusedinanywaytodetermineyourtestscores.Yourfinaltestscorewillbebasedonthenumberofquestionsyouanswercorrectly.Thepracticescenariosbeginonthenextpageofthisbooklet.Onlyconsiderinformationcontainedwithinthescenariowhendeterminingyouranswer.Consideringallinformationpresentedwithinthescenarioiscriticaltoansweringquestionscorrectly.Afteryouhavecompletedthetest,scoreyouranswersusingtheanswerkeylocatedattheendofthisbooklet.Addthenumberofcorrectanswerstodetermineyourfinaltotalscore.McKinseyProblemSolvingTest2Freddie’sShrimpShackFreddie’sShrimpShackFreddie’sShrimpShack(Freddie’s)isachainofapproximately100seafoodrestaurantslocatedalongtheGulfCoastoftheUnitedStates.Freddie’shasareputationforservinghighqualityseafoodatareasonableprice.AlthoughFreddie’sservesawidevarietyofseafood,themostpopularfoodsoldisshrimp.TwotypesofshrimpareavailableontheGulfCoast:ƒAquacultureShrimp:Theseshrimpareraisedonfarmsatanytimeoftheyear.TheyareusuallyimportedintotheUnitedStatesbylargeseafoodwholesalersanddistributors.ƒWildShrimp:TheseshrimparecaughtinthewildintheGulfofMexicointhesummerandautumnmonths.Hundredsofsmall,family-ownedboatscatchtheshrimpandsellthematdockshrimpprocessors.TherearedozensoftheseshrimpprocessorsscatteredalongtheGulfCoast.Boatownerswilltaketheshrimptothenearestprocessorwhoispayingthehighestprice.Theprocessorsthengrade,de-head,andfreezetheshrimp.Insomecases,theyalsopeelandde-veintheshrimp.Therearetwostandardformsthattheseshrimparesoldin:headless,shell-onshrimpandpeeledandde-veined(P&D)shrimp.Freddie’sbuysonlyheadless,shell-on,wildshrimpbecauseoftheirperceivedhigherquality.ItisnowOctoberandFreddie’soverallprofitabilityhasbeenfallingsinceimmediatelybeforethesummerseason.TheCEOhasaskedMcKinseytohelpherunderstandthereasonsbehindthistrendthatstartedinMay.ShestatesthattherecentfallinprofitabilityhasbeentotallyunexpectedandshewouldlikeMcKinseytolookintoit.ShealsonotesthatitseemsliketoomuchofacoincidencethatFreddie’sprofitabilityisfallingatatimewhenthepriceofwildshrimpisclimbing.Table1showsmonthlyrevenueforFreddie’s,inthousandsofdollars,fromMaytoOctober.Table1:Freddie’sMonthlyRevenuefromMaytoOctober(in$USThousands)MayJuneJulyAugustSeptemberOctoberRevenue1,2231,2641,3551,4021,3421,2923Freddie’sShrimpShackExhibit1trackstheaveragepriceofwildshrimpinthemonthsfromMaytoOctober,aswellasFreddie’sprofitmarginineachofthesemonths.InExhibit1,thedataforeachmonthispresentedasapercentageofthedatainMay.Exhibit1PriceofShrimpandProfitMarginofFreddie’sfromMaytoOctober(IndexedagainstdataforMay)80859095100105110115OctJunMaySepAugJulProfitmarginShrimpprice1.WhichofthefollowingstatementsbestdescribesthethoughtsofFreddie’sCEOregardingtherecentprofitabilitydecline?A)TheCEOwantsMcKinseytoinvestigatethedeclineinprofitabilitybecauseshedoesnothaveanyideasonwhatiscausingitB)TheCEOwantsMcKinseytoinvestigatethedeclineinprofitability,butwouldnotbesurprisedifthepriceofshrimpwasakeycauseC)TheCEOwantsMcKinseytoinvestigatehowanincreaseinthepriceofshrimpcanleadtoadecreaseintheprofitabilityofherbusinessD)TheCEOwantsMcKinseytoinvestigatewhythepriceofshrimphasrisenoverthelastfewmonths2.BasedonthedatapresentedinTable1andExhibit1,whichofthefollowingstatementsistrue?A)TherateofincreaseinshrimppricefromMaytoOctoberisthesameastherateofdecreaseinprofitmargininthesemonthsB)Freddie’smade5%lessprofitinAugustthanitdidinMayC)Freddie’smadeagreaterprofitinAugustthanitdidinMayD)Restaurantpricesforshrimpdisheswere10%higherinOctoberthaninMay4Freddie’sShrimpShackTheresearchmanageratFreddie’sgivesyoufivefactsregardingcustomereatinghabitsinitsrestaurantsasfollows:I.CustomersprefercolddishesinhotweatherII.CustomerspreferhotdishesintheeveningIII.MostcolddishesareshrimpdishesIV.HotdisheshavemorevariedingredientsthancolddishesV.Shrimpdishesaret