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Estimationstandard
Estimate the annual revenue of a city parking garage.
How to approach it
Count spaces, then estimate how full the garage is and at what price, separately for weekdays, evenings and weekends.
How a strong answer opens
“I'll count the spaces, then estimate how full the garage is and at what price, separately for weekdays, evenings and weekends, plus monthly passes.”
Outline of a strong answer
Try answering out loud for a few minutes before you open this.
- Clarify garage size and location
- Count spaces
- Occupancy by time of day and week
- Hourly or daily rates, and monthly passes for commuters
- Revenue = spaces x occupancy x hours x rate, plus pass income
- Sanity-check: revenue per space per day versus the street meter price
Where this question usually goes wrong
Assuming the garage is full all day at the hourly rate, which ignores off-peak hours and discounted monthly passes.
Learn the method
Top-down and bottom-up in Module 3, Estimation.
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