Guesstimates

Guess + Estimates

© 2021 Ashwin Goyal

Importance

Examples

• All types of interviews
• Consulting
• Data Analytics roles
• Analyst roles
• Product
• Quant
• No need for precise answers: ballpark numbers work
• Write the problem statement and approach
• Break down the problem statement
• Test Logical Reasoning
• Improve Mental maths for calculation

• No. of flights taking off per day from Chandigarh
• Estimate the number of boats in Varanasi.
• No. Of burgers made during the day in a McDonalds restaurant

Tougher questions- asked by MNCs

• "How many pay phones are there on the island of Manhattan?"
• "How many hotel-size bottles of shampoo and conditioner are produced each year around the world?"
• How would you estimate the weight of the New York's Empire State Building?

GUESSTIMATES

Helpful Data

INDIAN POPULATION: 1.2 billion

Chandigarh population: 1.2 million

Young: old ratio = 70:30 ratio

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Income split:

<5 lakh - 40%

>5 and <12 - 50%

>12 - 10%

​

​

Population:

Rural Urban

60 40

​

Rural

Age-. 0-19. 19-40. >40

​

1.2 billion:

Rural: 720 million

Urban: 480 million

GUESSTIMATES

Unemployment in India: 9%

Education level: 74%

Life expectancy in years (India): 66 years

Life expectancy in years (World): 70 years

Literacy Rate Delhi: 86.20%

Area - World: 510 million sq km

Area - India: 3.3 million sq km= 3000km*3200km

Area - Delhi: 1500 sq km= 573 sq miles

Average size of family in India = 5

Population of Delhi: 3 crores

Population below Poverty line India: 22%

Population below poverty line Delhi: 8%

GUESSTIMATES

GUESSTIMATES

Clarifying questions

Tips

Use % to split

Rural Urban

60% 40%

• Useful for Many types of interviews
• Help you narrow down your area of consideration
• Don’t be afraid to ask!

2 approaches:

• Demand e.g. no. of pizzas bought at Dominos every day
• Supply e.g. no. of pizzas made at Dominos every day

Estimate the total # of cars / light motor vehicles running on Indian roads

Clarifying pointers:

I will calculate the total number of cars on Indian roads at a given point in time.

This would also include the cars not being used and are at home but may be used at some point in the future.

GUESSTIMATES

Estimate the total # of cars / light motor vehicles running on Indian roads

Approach 1:

India has a population of 1.3 billion people

Let’s assume that 20% people are living below the poverty line/cannot afford cars: hence 260 million people cannot afford cars.

​

Now we can divide these people into the following 3 segments based on income:

Rich families (10%): 3 cars are owned by one family (assume 4 people per family)

Middle income families(40%): 2 cars are owned by one family (assume 4 people per family)

Lower income(50%): 1 car is owned by one family (assume 4 people per family)

​

Out of these, an additional 40% cannot drive a car due to one of the following reasons:

• Under the legal age of driving (youth: 20% in India)
• Above 70 years of age hence cannot drive (10%)
• Do not know how to drive (10%)

�This leaves 665.6 million people who can drive a car. �

This gives us a ballpark range of 600-700 million cars. Out of these, I assume only 40% are used at the peak hours (say 8pm). This means around 250 million cars are running on the road in the peak hours.

GUESSTIMATES

Estimate the number of LED devices sold in Bengaluru

The population of Bangalore is 12 million approximately. On average, each person requires atleast one LED device. Examples of LED Devices include: table lamp, LED bulb, tube light, remotes, physics lab equipment etc.

The population can be divided into the following segments:

Age>25 yrs (70%)

Age < 25 yrs (30%)

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GUESSTIMATES

Age>25 yrs (70%)

(70%) Corporates working in companies: 5 LED devices per person (this includes some devices which are at common places in the corporate complexes, like mess, meeting rooms etc)

(10% since very few housewives in Bangalore) Housewives at home: 20 LED devices at home (per family of 4 persons)

(20%) Old people: 2 per person (e.g. bathroom light, reading light, room tubelight)

Age < 25 yrs (30%):

(40%) Children < 18yrs of age: 1 per child

(60% since Bangalore is home to many colleges) College students: 3 per student (example room light, table lamp, bathroom light, classroom light)

This makes a total of 44.88 million LED devices in Bangalore.

GUESSTIMATES

Method 2

See it from a Supply perspective (instead of a Demand point of view)

How many LED devices are sold in Bangalore?

• How many shops are there which sell LED devices
• On average how many LED devices do they sell in 1 day
• Small, individual orders (e.g. for homes, shops)
• Bulk orders (e.g. for offices- corporate buildings, schools, colleges, malls, hospitals etc.)

Actual Interview | American Express | Guesstimate | IIT Ropar

Problem: How much area is covered by roads in India?

Interviewee: Ashwin Goyal (3rd yr)

1 way to solve: As per proper city guidelines at least 30% of the land should be roads.

(Point to be remembered)

GUESSTIMATES

Actual Interview | EXL | Guesstimate | IITM

Problem: How much soap is used in a month in India?

--Approach by interviewee --

Interviewee: Bar soap or Liquid soap? (Brownie point).

Interviewer: Bar soap. Interviewee: Are we concerned about any specific brand?

Interviewer: No.

Interviewee: Division of the population into rural and urban. Then divide them by the number of households. (Do you want me to include it in a tabular form?).

Then divide the number of washes per month by the number of washes a soap last. (Brownie Point).

Interviewer: Can you suggest an alternative approach which doesn’t involve people?

Interviewee: We can use the data of average water used in a household, divided by the share used in bathing.

Interviewer: Any other? Interviewee: Am I allowed to ask for any data?

Interviewer: Yes.

Interviewee: Can I approach a supermall/local shop? Interviewer: Yes.

Interviewee: Great, then we can list the number of soaps purchased in a day and the soaps remaining on the shelves. This will give us the average usage of soaps in the households of the locality without involving them. Interviewer: Great approach.

QUESTIONS?

© 2021 Ashwin Goyal