Decide whether to sell both SKUs
Capital OneData Scientist · Technical ScreenLast updated
This question evaluates a data scientist's competency in profit-impact modeling, break-even analysis, and accounting for cannibalization effects using unit contribution margins and fixed costs.
Derive the condition under which adding the Vegan burger increases total profit, given: Regular unit margin $3, Vegan unit margin $2, fixed vegan costs F (training + supplier retainer), and cannibalization rate c (fraction of Vegan sales that would have been Regular). Express the break-even Vegan unit sales as a function of F and c, interpret edge cases (c = 0 and c = 1), and describe how you would estimate c in practice.
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