Guesstimate

Guesstimate is a methodological process of guess and estimate. Guesstimates have now become an important part of several Business Analyst/Data Scientist and MBA interview process.

What does a person asking you questions as absurd as “How many people are wearing red today?” is looking for ?
You know that he has no idea about the same but he has the power to select or reject your candidature. You will be judged entirely on the basis of your approach and the number of points which you can think of.

One and only one thing to keep in mind when you are solving a guesstimate question – You should start with a number and you have to be very very consistent with the same in the entire solution. And be very particular about your assumptions.

Let’s take an example:

What are the number of iPad sold in India in 2018?

Assumption 1 – Population of India is 1000 Million (though it’s 130 but you can safely assume a round of number of simple calculation and this is very much acceptable)

Assumption 2 – Population percentage below poverty line – 60%
and Population percentage of upper middle class 20%, whereas the rest 20% is the middle class. So there are 200 Million people who are financially eligible to buy an iPad.

Assumption 3 – Now take these 200 Millions as your base number. Dividing this 200 Million into Rural and Urban population:

Rural – 20% = 40 Million
Urban – 80% = 160 Million

Let’s divide the Rural and Urban population on the basis of age:

Rural Total population = 40 Million

AgePopulation
Percentage
Population
(Number)
Percentage buying
iPad
iPad Sold
0-12 YO10%4M0%0M
12- 20 YO30%12M30%3.6M
20-40 YO30%12M40%4.8M
40-60 YO10%4M10%.4M
60 + YO20%8M0%0M

Total iPad sold in Rural area = 8.8 Million

AgePopulation
Percentage
Population
(Number)
Percentage buying
iPad
iPad Sold
0-12 YO10%16M0%0.0M
12- 20 YO30%48M40%19.2M
20-40 YO30%48M80%38.4M
40-60 YO20%32M40%12.8M
60 + YO10%16M20%3.2M


Total iPad sold in the Urban area = 73.6 Million

Total iPad sold in India = 82.4 Million

This number might be very close or very off, but you took a couple of factors and successfully derived a number.

You can also take more factors like:-
1. Occupation – People working in Technical field are more inclined towards buying gadgets(Assumption)
2. High or low number of service center in a particular city – A city with more number of Apple service centers will sell more devices (Assumption)

With every new factor, your calculation will increase in complexity. So, add factors only if you think you can manage the calculation.

It’s always better to arrive at a number after 15 minutes of discussion with limited factors than arriving nowhere after 1 hour of intense discussion with a lot of factors.

If you want to practice more, you can visit this link

XtraMous






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