Friday, February 06, 2009

McDonalds, and Bank Employment

Not quite as many interesting responses to yesterday's question as I had hoped, but at least one resourceful reader did manage to come pretty close just using internet research. The question was how would you go about trying to guess how many eggs McDonalds goes through around the world in an entire year.

Here is my formula, and then I'll give you the answer:

So there are 31,000 McDonalds restuarants worldwide, 13,000 of them in the U.S. (this I already knew as a stockholder in the company). Let's assume that over the entire roughly 5-hour breakfast session in the U.S., the busy McDonalds restaurant near my office at work serves one breakfast, averaging two eggs per order, every minute or so. This includes an average of the real busy periods as well as the outlier times just after opening and just before the lunch switchover when things are less busy. In fact, this is a busy McDonalds in the middle of Manhattan, so let's say the average store is 50% less busy, serving up one two-eggs breakfast every 90 seconds over 5 hours. That is 300 minutes of breakfast, and thus 200 breakfasts served on average. That is 400 eggs per day for your average U.S. store.

Let's assume that outside the U.S., people in general eat breakfast as McDonalds less frequently, and also that the breakfast foods available in those regions include fewer eggs overall, to include for local customs and eating habits. So, for McDonalds' 13,000 U.S. stores, that is 400 eggs a day, and for the 18,000 foreign stores, let's peg the number a little lower, let's say at 300 eggs per day. So that is 13,000 x 400 eggs = 5,200,000 eggs per day from the U.S. stores, and 18,000 x 300 eggs = 5,400,000 eggs per day from outside the U.S. This is a total of 10.6 million eggs per day for McDonalds. Multiply that number times 365 (let's ignore any differences from weekdays vs weekends and assume those are already factored in to my above daily averages) and you get 10,600,000 x 365 = 3,869,000,000 eggs per year.

The real answer is somewhere between two and three billion eggs per year. As Lester pointed out in the comments, this is some sick figure like 2% of the total worldwide production of eggs from fowl, all to McDonalds just for their breakfasts. But as I said yesterday, the real fun is in the way you choose to figure out the answer to a question like this. I've heard that some prominent U.S. companies ask questions like this in interviews -- one blogger IMd me that he was asked by a large technology company how many white cars there are in America -- and I had heard this one and thought it was interesting.

There's my thoughts for a Friday. Other than that, this is the story that most caught my eye so far in the financial news today. A prominent and well-respected banking analyst expects another 30% job cuts at the major investment banks over the coming years, something with which I fully agree. This was the biggest reason why I left Lehman Brothers last summer when I did -- although I certainly thought Lehman was going to have a tough time getting along independently, it's not that I necessarily knew the company would be declaring bankrupcty less than a month after my departure. My issue was that, even if Lehman could make it alone, I simply did not think financial services was the industry to be in for some time, as the banks as a whole will have to go through a painful time of deleveraging and rightsizing and compensation-cutting that I simply did not feel the need to be working there for. Still, that expectation for job cuts of as much as 30%, that is going to be a fugly time for anyone working in the banking industry as well as those companies who depend on selling to or buying from such firms. Maybe this new bank bailout to be announced on Monday can help these bloated firms get a bit better of a handle on their businesses.

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Blogger SirFWALGMan said...

So the answer is pull numbers out of your ass and act like they are facts.. Sounds good to me.

3:08 AM  
Blogger Riggstad said...

Obv my final answer was per day, as I neglected to muliply the final daily number by 365 days.

I can't wait to read what you have to say about the A-Rod news today.

11:49 PM  
Blogger Chef said...

Dude, check out the book titled, 'How would you move Mt Fuji'. All sorts of questions asked on interviews by the bigs. Great way to change your thinking too, open your mind and your ass will follow


5:45 AM  
Blogger Otis said...

Not that you asked, but # of white cars in America...somethere around 4.75 million. Ish.

8:13 AM  

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