555: Build hypotheses with decision trees (Case Interview & Management Consulting classics)
Case Interview Preparation & Management Consulting | Strategy | Critical Thinking
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Building Hypotheses in a Mutually Exclusive Collectively Extensive Way
I would, I'd hypothesize that it is possible that although variable costs have decreased due to the drop in revenue, they have not decreased sufficiently to compensate for the drop in Revenue. On the fixed cost side, I would could hypothesize that due to the longer operating hours, our fixed cost may have increased to carry the longer operating Hours. The point I'm trying to make here is that if you build your hypotheses of branches of a decision tree, you are guaranteed to cover all the points because by default, your decision tree would be collectively exhaustive.
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