Start by clarifying the question, identifying the variables, and stating the assumptions that are applicable to this problem. The relevant variables to solve this case are:
- Percentage of the US population that drinks coffee
- Average number of cups of coffee consumed
- Coffee drinking patterns on weekdays and weekends
Step 1: Establish the percentage of US population that are coffee drinkers
Assume that the US population is 300 million (to keep the math simple). Among this population, some don’t drink coffee, but prefer other beverages (e.g. tea, juices, cola, water, etc.). Let’s assume this segment to compose 20% of the population. In addition, parents prefer that their young children don’t drink coffee, so let’s assume this segment to compose another 20% of the US population. In total, 40% of the US population doesn’t drink coffee, which brings the sample space of coffee drinkers to 60%. You won’t have to calculate the exact figure yet.
Step 2: Average number of cups of coffee per day
Let’s assume that 50% of the coffee drinkers consume 2 cups per day, 25% drink 1 or 4 cups per day. This brings the average number of coffee cups to:
2 cups × 50% + 4 × 25% + 1 × 25% = 2.25 cups per coffee drinker per day (average). Coffee consumed per day = 2.25 x 60% x 300 million = 405 million cups per day
Step 3: Coffee drinking patterns (weekdays and weekends)
Coffee drinking patterns vary according to the day of week. People, especially office goers, usually tend to drink more coffee during weekdays than on weekends. You can assume a consistent coffee drinking behaviour, but you will earn some brownie points for a tighter analysis by addressing different coffee drinking patterns during weekdays and weekends. Assume that only 30% of coffee drinkers prefer to consume coffee on the weekend, while 100% of coffee drinkers grab a coffee during the week. Therefore the calculation is:
Weekdays: 405 million cups per day x 5 working days x 100% of coffee drinking population = 2,025 million cups Weekends: 405 million cups per day x 2 days (Saturday & Sunday) x 30% of coffee drinking population = 243 million cups Total: 2025 + 243 = 2,268 million cups
Download the solution Excel file.