Guesstimates

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

How to Solve Guesstimates?- Recap

•Restructure and clarify the problem statement

•Prepare a structure to approach the problem-Top Down/Bottom-Up frameworks
•State proxy and assumptions. Mention the source to verify the assumptions
•Proxy- A parameter which behaves in a similar manner as the dependent
parameter
•Specify formula used, if any
•Calculate and arrive at answer
•Keep the interviewer engaged by asking questions throughout
•Look out for brownie points

PLACEMENT PREPARATION COMMITTEE, IIM INDORE 2

Dell has launched a new laptop in April 2017. Estimate the
number of laptops it will sell in the quarter Jan-March
2018

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

 Approach 1
• College going students are in the 18-27 age group
18-27
Engineering/ Commerce
(20% of India’s Arts Others
Source: Doctors/ Post (25%) (25%) (10%)
population)
Census Graduates
(40%)
College going Unemployed
Working
(25%) (25%)
(50%)
(90%) (70%) (50%) (10%)

Engineering/ Commerce Arts Others

Doctors/ Post Laptop
(25%) (25%) (10%)
Graduates penetration
(40%)

Population of India (Assumption): 1 bn Number of laptops in the system: 33.5 mn

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

Approach 1 (Contd.)
Dell
Number of laptops in the system: 33.5 mn (2 mn)
Laptop lifecycle: 5 years

# laptops purchased each year 33.5 /5 =

6.7 mn April – June July – Sep Oct – Dec Jan – Mar
2017 2017 2017 2018
(10%) (50%) (20%) (20%)
Dell HP Apple Smaller Since the product launched in April 2017, the
(30%) (20%) (20%) players sales in the 1st quarter would be quite low. The
(30%) 2nd quarter is when students join colleges and
would mostly purchase laptops. Sales in 3rd and
Since Dell offers customization and the 4th quarters have been assumed equal
smaller players would be cheaper, they would
have higher market share among students # laptops sold = 0.4 mn

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

Approach 2 (Bottom Up Approach)
Number of college students can be calculated by :
• Calculating the number of students studying in colleges in your city
• Extrapolating the number to the whole nation

Lets start with Indore

• Assuming number of colleges in Indore = 20
• Average number of students getting admitted in one college = 500 (Considering all courses)
• Number of students getting admitted in Indore = 500*20=10000
• The number of cities with around 20 colleges = 150
• Extrapolate to other cities considering different segments of cities based on size- Tier 1, Tier 2, Tier 3,
Metro by taking suitable multiples
• Follow further approach as before

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

 Approach 3
Number of college students can be calculated by :
• Calculating the number of students studying in one university
• Extrapolating the number to the whole nation

Lets start with Mumbai University :

• Assuming number of colleges in Mumbai = 300 (Assuming that each city has one university only)
• Average number of students getting admitted in one college = 500 (Considering all courses)
• Number of students getting admitted in Mumbai University = 300*500=150000
• Similarly the number for Pune University would be around 50,000 – Number equivalent to Smart
Cities – Major Universities (20)
• Similarly, calculate for smaller Universities in cities and autonomous Universities like IITs, IIMs etc
• Follow further approach as before

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

Note
• In these approaches we are not considering students who are going abroad for education

• SAT or other international exams can be taken as a proxy to find this number

• 100% penetration could be assumed as it is more of a commodity for such students

• This number should be added to the 6.7 mn laptops purchased in the year

• Market share assumption would be skewed more towards Dell and Apple as these have international
reach

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

How many traffic signals are there in Indore?

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

Ques.
The area of the Indore city is approximately 5000 million sqft(400km²). Assuming
Indore to be a rectangle, it can be divided into roads vertically and horizontally. The
traffic signals are present at the intersections of these roads. The distance between
two roads in the city is m kms horizontally and n kms vertically
Since Area is 400km2 , the length and breadth of the city needs to be assumed based
on the understanding of the geography of the city
Here we are assuming 40km length and 10 km breadth
So,
number of traffic signals = (40/n )* (10/m)
1 2 3 4 Eg.
5 6 7 8 m= 2,n= 10
9 10 11 12 So number of traffic signals =
13 14 15 16 (40/10)*(10/2) = 20
For illustrative purposes only

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

Some guesstimates for practice:
1. How many golf balls are in air right now?
2. How many weddings are performed each month in Indore?
3. How would you estimate the weight of the Taj Mahal?
4. How much change would you find on the floor of an average mall?
5. What is the annual size of the cricket ball market in your city?
6. How many red cars are there in India?
7. How many times would the population of India circle the globe if they held hands?
8. How many barbers are there in Indore?
9. What are the revenues of the Adda/Jam present in your institute?
10. How many hotel-size bottles of shampoo and conditioner are produced each year around the world?
11. Estimate the number of beers sold in Goa every year?
12. Estimate the market size of women trimmer in India?
13. What is the revenue earned per month by selling popcorns in a PVR in Indore?
14. How many 3D movies will be produced in India in 2050?
15. Estimate the market size of white boards in your city?
16. How many tennis balls are being used at the moment in Indore?
17. How many trees are there in IIM Indore campus?

PLACEMENT PREPARATION COMMITTEE, IIM INDORE

 Thank You

PLACEMENT PREPARATION COMMITTEE, IIM INDORE