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Diners Mining - Case 11 (IC2)

Case 11 (IC2) -- Diners Mining

CLIENT SITUATION

Our client is Diners Mining Company, a mining company located in South Africa that’s a wholly-
owned subsidiary of the Diners parent company. The Diners CEO is flying from London to spend a
couple days getting acquainted with the new management at Diners Mining. The Diners Mining staff
is taking him to dinner and got reservations at the exclusive Platinum Room at the Flavors of the
World Café. The Diners staff just received a voicemail from the manager, who wants to establish the
menu for the evening, but the staff is too busy putting together their presentations for the CEO to
spend time choosing the perfect menu. They’ve asked you to figure it out.

NOTES FOR INTERVIEWER

Relevant facts (reveal one-by-one when asked)

1) The most important objective is to choose the food that’s optimal given the CEO’s preferences.

(Phase 1): Ask: So, what’s your best guess on what foods we should choose?

(Phase 2): Ask: What’s the most efficient pathway by which you can reach the ideal answer to this
question?

Candidate mentions deciding upon

INSIGHT
key criteria and evaluating options
#1:
upon those criteria.
(Phase 3): Ask: What do you
imagine would be some relevant criteria to make this decision? (Prompt candidate “what else, what
else”?

INSIGHT Candidate mentions at least four

#2: criteria.

INSIGHT Candidate specifically mentions

#3: budget, health, and CEO’s tastes.

2) The CEO has established a firm spending cap of 10,000 Rand (ZAR) per night absolute maximum
all-inclusive total for executive dining events.

3) The CEO has a deadly peanut allergy.

4) The CEO is under strict orders from his doctor to lose weight. Thus far, he’s lost 15 kilograms
through careful moderate-calorie food choice and exercise. He’s achieved half of his weight loss goal
thus far.

Tell candidate: Take a look at Exhibit 1 (Reveal Exhibit 1). Here we’ve collected what we know
about the CEO’s food preferences by talking to other people around the company.

INSIGHT The CEO generally likes steak and

#4: dislikes “rabbit food”.

Tell candidate: (right after revealing Exhibit 1) Now take a look at Exhibit 2. The only way the Flavors
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of the World café can accommodate our group of 20 is if we choose one appetizer, one entrée, and
one dessert so that everyone has the same thing and it streamlines their kitchen processes. Given
all you know, what’s the ideal menu?

When you take into account the

taxes, gratuity, and size of the
INSIGHT #5: party, the sum of listed prices of
Appetizer + Entrée + Dessert for
each person needs to be under 400
ZAR.

There is no way to get the steak,

INSIGHT
an appetizer, and a dessert while
#6:
staying within budget.

The tofu vindaloo initially seems

like a potential winner given that
INSIGHT it’s spicy, low-calorie, cost-
#7: effective, and Indian…but the
peanut sauce makes it
unacceptable to the CEO given his
allergy.

The CEO would likely enjoy Maria’s

INSIGHT
Cheesecake, but it has over 7
#8:
(Phase 4): Say to candidate: times the calories of the gelato.
There has been some talk in
South Africa about adding The optimal menu fits within the
an additional tax on luxury
budget, aligns to the CEO’s food
dining. Tell me, if this were
INSIGHT preferences, and has a moderate
to go into effect before our
dinner with the CEO, what’s #9: number of calories. Thus, the
the maximum tax rate (as a
optimal menu consists of Grilled
proportion of the meal bill)
that would allow your calamari + Jerk Chicken + Gelato
suggested menu to stay and fruit.
within budget?

INSIGHT The maximum tax rate would be

#10: approximately 3%.

(Phase 5): Say to candidate: The Flavors of the World Café folks just called back. The owner would
love to know your decision now and is also curious as to your rationale behind this.

CALCULATIONS

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1) Compute the total budget per person by dividing the total budget by the number of people dining
(10,000 ZAR / 20 people) = 500 ZAR / person

2) Compute the maximum allowable sum of menu prices from appetizer + entrée + dessert by
discounting the total for taxes and gratuity (10% tax + 15% gratuity = 25% X 500 ZAR / person =
100 ZAR per person discount total. 500 ZAR total – 100 ZAR for taxes and gratuity = 400 ZAR /
person total nominal menu prices.

3) Begin computing the maximum luxury dining tax that would put the group over budget by adding
up the prices of the three menu items and grossing up for the current taxes and tip (50 ZAR + 260
ZAR +80 ZAR = 390) X 1.25 = 487.5 ZAR

4) Subtract this amount from the total budget per person (500 ZAR – 487.5 ZAR) = up to 12.5 ZAR
that may be paid in dining luxury tax.

5) Compare 12.5 ZAR against the price of food to derive a percentage (12.5 ZAR / 390 ZAR) = 3.2%
(estimating a the number 3% is fine)

Copyright Victor Cheng / All Rights Reserved 2012 / Not for use by unauthorized
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