2/2/24, 3:57 PM Guesstimate Questions and Answer for MBA Placement Interviews

It gives you the necessary information to solve an otherwise-unclear problem.

It brings you and the interviewer on the same page, preventing later disagreements.
It shows an ideal, organized approach to problem-solving similar to what consultants do.
It buys you some time to think about the problem.

4. Break down the problem

Ask for timeout, then break the problem down into pieces small enough to estimate reasonably.

Each small piece has to be easier to estimate than the big piece – if you can’t estimate the small pieces, you’re not breaking down
enough, or you’re doing it wrong

5. Solve each piece

This is where you solve each piece independently.

Don’t try to do this during the “timeout” phase – most likely it will turn the otherwise-short timeout into a long awkward silence –
which is bad.

Here are some quick guesstimates for the German smartphone market:

Germany’s population is 80 million

The percentage of mobile phone owners is 80% (assuming German life expectancy is 80, the population is evenly distributed
across age groups and they own mobile phones from age 15)
The percentage of smartphone owners is 95% (assuming only 5% own mobile phone owners choose a “keyboard phone” since
Germany is a developed country)
The average lifespan of smartphones in Germany is 2.5 years (so the average consumer “uses” 0.4 phones every year)

6. Consolidate the pieces

Now that you understand the basic guidelines of how to answer a guesstimate, you’re ready to put your knowledge into practice.
Use calculations to consolidate the pieces into a final answer.

Quick mental math is essential for this step – if your math is too slow, you will bore the interviewer to death. Nevertheless, don’t
rush it – wrong calculations are bad for case interviews.

Some additional tips:

Know basic facts – Guesstimates might seem difficult if you are unaware of some critical numbers. Please ensure that you
know the below-listed points, which will help you in solving the guesstimates.a. Rural-Urban Splitb. Gender Splitc. Metro cities

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2/2/24, 3:57 PM Guesstimate Questions and Answer for MBA Placement Interviews

in India and there approximate populationd. Income Split of the population in Indiae. Age Split of the populationf. Average
household size
The devil lies in the details – While solving the guesstimates, ensure that you try to explore all aspects. The interviewers are
judging your analytical and problem-solving ability so try to break down the problem into as small bits as possible
Avoid representative sampling – I have seen people using representative sampling techniques which are honestly
ineffective. For example, I know ten people out of which five are smokers, so if I assume the ten people to be representative of
the entire target customer segment, 50% of them would-be smokers. It is a flawed argument because of inherent biases and
social habits. (a smoker will most probably be friends with other smokers and vice versa)
Always take buy-in from the interviewer for your assumptions and clearly explain the rationale for the same.
Use pen and paper for calculations – it might sound foolish as a tip, but believe me, in the pressure of interviews, even the
smartest amongst you can commit mistakes. Please make sure that you double-check your answers.

Examples of some important Guesstimates

Ques. How many people live in your housing society?

Ans.

1. My society has two types of houses: Apartments and row houses.

2. I then think about the number of apartments and row houses. I remember there are Apartment blocks numbered 1 to 30. There
are 4 row house lanes and each might have 8 row houses I guess.
3. Now I have the following first level estimates:30 apartment blocks and 32 row houses.
4. An apartment block in my society has 9 floors each with 3 apartments. So, 27*30 = 810 flats.
5. A row house has 2 floors, each with 2 flats – makes the total as 2*2*32 = 128 flats.
6. So, total number of flats = 810+128 = 938. I know the average household in India has approx 5 members. I also know that
some flats are still not occupied. I make a guess; let’s assume 10% flats are not occupied.
7. I get the final number of people living in my society: 938*0.9*5 = 4221.

Ques. Estimate the number of cigarettes consumed monthly in India

Ans. A good proxy in such a problem is the population of India, i.e., 1.2 billion. Following is an effective way to segment this
population:

1. The rural population consumes far fewer cigarettes than urban because of the purchasing power difference.
2. Male consume more cigarettes than females in both urban and rural populations.
3. Children below 16 years consume a negligible number of cigarettes.
4. Male to Female ratio in Urban is closer to 1 than that of Rural.
5. Male to Female ratio in younger generations is closer to 1 than that of older generations. This is because of the increase in
awareness level.
6. Bulk of the population start smoking after getting into a job and hence the average number cigarettes are higher in older
groups.
7. Total number of cigarettes from the supply side also comes to around 10 Trillion, which gives a good sense check on the final
number.

Ques. How many cups of tea were consumed in Mumbai last month?

Ans. As a first step, inform the interviewers that each day of the week is being considered equally. Tea consumption might likely
decrease during the weekend as people do not go to the office—so you might consider that as well. We shall go with the first
assumption.

The population of Mumbai is 18 crore; we shall round it up to 2 crores. 20% of this population is assumed to be children who do
not drink tea.

Another assumption is that of the remaining population, 20% are habitual drinkers, 30% are regular drinkers, 20% are occasional
drinkers, and 10% are non-drinkers.

The habitual drinkers may be said to have three cups of tea in a day. Regular drinkers may be said to have one cup of tea in a day.
The tea consumption of occasional drinkers maybe once a week, and that of non-drinkers none at all.

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2/2/24, 3:57 PM Guesstimate Questions and Answer for MBA Placement Interviews

Calculating proportions-

Habitual – 3 x 0.2 x 7 = 4.2

Regular – 1 x 0.3 x 7 = 2.1

Occasional – 1 x 0.2 x 1 = 0.2

None – 0
Total = 6.5
Total cups per week = 6.5 x 1.6 crore = 10.4 crore
Ques. How many iPhones are currently being used in India?
Ans.

Clarify with the interviewers whether the question is about only a single version of the iPhone or all versions put together. Here, we
shall assume that all iPhones put together are being talked about.

1. The first step toward solving this query will be segmentation. There are many ways in which India’s population can be
segmented. Here, we shall first assume that only people who have attained a working age and are under the age of retirement
own an iPhone. Children and old citizens do not own an iPhone. This removes 20% of the population as children and 20% as
senior citizens.
2. The next assumption will be that only the upper stratum of India’s income range can afford an iPhone. This metric assumes
that only 5% of the eligible citizens from the previous filter can own an iPhone.
3. Now, it is not necessary that every member of this upper stratum will own an iPhone. Other options, such as OnePlus,
Samsung, etc., are also available. However, a fair assumption would be that 50% of the eligible population from the previous
filter owns an iPhone.
4. Calculating the proportion of the population that owns an iPhone –
5. 0.6 x 0.05 x 0.5 = 0.015
6. Total iPhones in India = 0.015 x 130 crore = 1.95 crore

Ques. How many cars are there in Delhi?

Ans.

Clarify whether the interviewer assumes just personal vehicles or all cars, as Delhi is also a government seat. The assumption in
this solution will be that only personal vehicles are being talked about.

Firstly, the population of Delhi is 2 crores, rounding up. The average size of a family in Delhi may be said to be four people, it being
an urban region mostly composed of nuclear families. Further segmentation may be as per income class or level. As is customary,
30% of people may be said to belong to the lower class, 50% to the middle class, and 20% to the upper class.

The calculation metric will be the number of cars per family. Among middle-class families, 50% may be said to own a car, and the
other 50% own no car. Among the upper-class families, it may be said that all families own an average of two cars.

Calculating proportions-

Middle class families – 0.5 x 0.5 x 1 = 0.25

Upper class families – 0.2 x 2 = 0.4

Total = 0.65

Total cars in Delhi = 2 crore * 0.65/4 = 32.5 lakhs.

Ques. What is the Surf excel detergent usage in a day in India?

Ans. The best way to start with this question would be with the population.

India ~1.3 billion

Rural ~ 70% ~ 900 million

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2/2/24, 3:57 PM Guesstimate Questions and Answer for MBA Placement Interviews

Urban ~ 30% ~ 400 million

Rural - upper BPL : ~ 40% = 360 million

Rural (BPL) : 60% 540 million

Rural (BPL)

We can assume Rural BPL mostly as collective households, averaging at 5 per family: ~110 million

1. Mostly they use sachets. let’s average the usage 2 sachets of 3 rs each per week: 24–30 Rs. per month ~ 25*110 = 2750
million INR.
2. Now Surf Excel is a little costly sachet , and given cheaper alternatives available, we can assume its share to be around 5–
10% =200 million
3. For per day: 200/30 ~ 7million INR

Rural (Above BPL)

1. We can assume 4 sachets per week ~ 12 = 50–60 per month

2. Total household: 72 million = 72*60 = 4320 million INR monthly
3. Surf Excel share ~ 20% (others going to wheel, rin, ok, ghadi etc.) = 864 million INR
4. Daily use therefore: 864/30 = 28.8 million INR
5. Total Rural daily revenue: ~ 35 Million INR

Urban

1. Urban Low class ~ 30% = 120 million = 22 million household : Usage 250gms per month: 50 INR = 1100 Million INR
2. Surf Excel share: 5–7% = 77 million INR.
3. Daily: 77/30 million INR = 2.10 million INR
4. Urban Middle class: - 40% = 160 million = 40 million households (4 per family)
5. Average use: 500 gms per month , 90 Rs per month = 3600 million INR
6. Surf excel share: 20–25% = 900 million INR
7. Daily : 900/30 = 30 million INR
8. Urban High Class: 120 million ~ 30 million households (4 per family)
9. Average use: 1kg per month, 200 INR = 6000 million INR.
10. Surf Excel (King here) ~ 70% share ~ 4200 million INR
11. Daily = 4200/30 = 140 million INR.
12. Total Urban daily revenue: = 172 million INR

So total daily monetary value of the usage:

1. Rural daily + Urban daily = 35+172 = ~ 210 million INR

2. So Surf Excel totaling a value of Rs. 210 million is used in India daily.
3. If you want to find out the quantity, let’s divide it by the average kg price ~ 160 INR
4. = 210/160 Million Kgs ~ 1.3 Million Kilograms per day.

Some more Guesstimates for practice:

1. What is the market size of toothbrushes in India?

2. How many flights does Bangalore/Mumbai/Delhi Airport handle in a day?
3. How many balloons can be packed in an Airbus 380?
4. What is the market size of refrigerators/TVs/Smartphones in India?
5. How many Chocolates are sold in a day in India?
6. What is the market size of Noodles in India?
7. How many idlis are consumed in India in a year?
8. How much paint is required to paint this room?
9. What is the market size of disposable diapers in India?
10. How much biryani is consumed in India in a year?
11. How much toothpaste is used in a day in India?

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