Validate farmer demand for a Warangal service
Before the decision
High stated intent at village meetings rarely turned into bookings during the actual harvest. The team accepted expressions of interest as a proxy for demand at first. Several growers later explained that they could only decide once they knew the likely harvest date.
The problem
Should the team choose Assisted signup or Self-serve listing for the next 12 months?
Decision owner: The business unit lead.
Group meetings can overrepresent farmers with time and larger holdings.
Option economics
Scroll the table to see all figures.
| Option | Volume (fulfilled bookings) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Assisted signup | 23,000 | 235 | ₹39 lakh | ₹15.05 lakh |
| Self-serve listing | 17,300 | 278 | ₹24.5 lakh | ₹23.59 lakh |
Make the call
- Calculate net contribution for Assisted signup and Self-serve listing. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer fulfilled bookings, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Self-serve listing. It contributes ₹23.59 lakh after fixed costs and leads by ₹8.54 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Specify the eligible population and the outcome before collecting data. Treat the figures as planning estimates. Use comparable groups to measure the effect before rollout.
- Calculate both options
Assisted signup: 23,000 fulfilled bookings × ₹235 less ₹39 lakh in fixed costs gives ₹15.05 lakh. Self-serve listing: 17,300 fulfilled bookings × ₹278 less ₹24.5 lakh in fixed costs gives ₹23.59 lakh.
- Stress-test the forecast
Self-serve listing leads by ₹8.54 lakh in the base case. If Self-serve listing delivers 10% fewer fulfilled bookings (15,570) at the same margin and fixed cost, it contributes ₹18.78 lakh. Holding the other option constant, the stressed result still leads. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Self-serve listing needs at least 14,227 fulfilled bookings to match or beat it under the model. Follow up with a stratified sample and compare paid usage during the next window.
Group meetings can overrepresent farmers with time and larger holdings. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
Check whether your answer names the trade-off, cites a number from the exhibit and specifies a reversal condition.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Assisted signup | Self-serve listing | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹9.65 lakh | ₹18.78 lakh | Self-serve listing |
| Base assumptions | ₹15.05 lakh | ₹23.59 lakh | Self-serve listing |
| Both gain 10% of volume | ₹20.46 lakh | ₹28.4 lakh | Self-serve listing |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.