Sell rooftop maintenance in Ranchi?
Before the decision
Installers report maintenance demand after the first monsoon, but many leads are duplicate sites. The installer pipeline counts inquiries from several housing societies as independent leads. The service head wants to know how many visits could be combined without breaking the promised appointment window.
The problem
Should the team choose Local technician team or Installer referral for the next 12 months?
Decision owner: The business unit lead.
A local team has idle travel time unless visits cluster geographically.
Option economics
Scroll the table to see all figures.
| Option | Volume (contracts) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Local technician team | 1,200 | 5200 | ₹48 lakh | ₹14.4 lakh |
| Installer referral | 1,600 | 2500 | ₹9 lakh | ₹31 lakh |
Make the call
- Calculate net contribution for Local technician team and Installer referral. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer contracts, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Installer referral. It contributes ₹31 lakh after fixed costs and leads by ₹16.6 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Separate demand you can reach from demand you can serve reliably. Test reorder behaviour before using the full-year forecast.
- Calculate both options
Local technician team: 1,200 contracts × ₹5,200 less ₹48 lakh in fixed costs gives ₹14.4 lakh. Installer referral: 1,600 contracts × ₹2,500 less ₹9 lakh in fixed costs gives ₹31 lakh.
- Stress-test the forecast
Installer referral leads by ₹16.6 lakh in the base case. If Installer referral delivers 10% fewer contracts (1,440) at the same margin and fixed cost, it contributes ₹27 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, Installer referral needs at least 936 contracts to match or beat it under the model. Deduplicate leads by site and estimate route density from completed visits.
A local team has idle travel time unless visits cluster geographically. 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.
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 | Local technician team | Installer referral | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹8.16 lakh | ₹27 lakh | Installer referral |
| Base assumptions | ₹14.4 lakh | ₹31 lakh | Installer referral |
| Both gain 10% of volume | ₹20.64 lakh | ₹35 lakh | Installer referral |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.