We want to offer extended transaction reporting to our customers. Today, customers often call unnecessarily, if they see a transaction in the monthly statement and do not remember the transaction. Each call costs us about $15. Research shows, that we could reduce the amount of calls by 2%, if we would offer additional details for each transaction as for example, the location, more detailed merchant information (instead of just payment processor), correct time (not as reported by payment processor). However, to do this, we need to buy services from external vendors. They offer a service where we would supply the transaction and would receive additional information for the transaction as outlined above. We have two vendors we could work with: Vendor A: Vendor A would charge us 10 cents per transaction we sent. They could provide the additional data for about 60% of the transactions. Vendor B: Vendor B would charge us 5 cents per transaction we sent. They could provide the additional data for about 40% of the transactions. Questions: 1. Which vendor should we pick and why? 2. Besides the financial data, what other consideration could be important? 3. Would your recommendation change if we had a fixed budget of $100k? 4. Assuming we have a different possible budget scenarios, up to which point would you recommend one vendor over the other (based on financial considerations only)? The questions weren’t all asked upfront. Actually the interviewer led the candidate through a developing scenario along the four key questions. Only material allowed was paper for notes, pen and a standard calculator. The interviewer did provide help along the way through guiding questions. At the end of the interview, all notes were collected. So the details of the scenario (e.g. exact numbers) as well as the lead in story (e.g. details on the additional transaction details) are from memory.
