Guesstimates

Guesstimates are one of the most crucial parts of every interview during the internship, placement season and B-School competitions especially if you plan on having a career in consulting or analytics industry where you need to know how to guesstimate. Guesstimation can feel like a daunting task, especially when you first look at the kind of questions asked. From the market sizes of large conglomerates to revenues and populations, calculating some of these quantities even close to a ballpark is realistically impossible.

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However, it is here that you must realise that guesstimation is never about the answer.?Guesstimate interview questions?assess you according to the approach that you take in solving a certain question. Guesstimate questions are asked to test the quantitative ability, numerical thinking & judgment to arrive at reasonable solutions This approach tells your prospective employer whether you are fit for the job you are applying for.

What is Guesstimate

Guesstimate is an estimate based on a mixture of guesswork and calculation. An estimate is usually made without adequate information.

How to handle Guesstimate questions:

1.??????Don’t panic

When approaching a guesstimate question, the first thing to remember is not to panic. If you’re visibly shaken when presented with a guesstimate, it’ll hurt your candidacy—it’s extremely important that you don’t lose your cool. Also, don’t let yourself struggle verbally. You’re free to say something like, “That’s an intriguing question. Can I have a moment to think it through?” This statement immediately shows your interviewer that you’re still in control and gives you some breathing time to think about a method for answering.

2.??????Think out loud

When answering a guesstimate, you want showcase your ability to analyze a situation and form conclusions by thinking out loud. You’ll drive toward a conclusion through a series of increasingly specific analyses. Once you’ve had a minute to compose your thoughts, be sure to talk through your reasoning, allowing your interviewer to see (and hear) that you're arriving at your answer in a logical manner.

3.?????Round up and estimate

You should realize that, for the purposes of a guesstimate, 1,000,553 is the same as 1 million, and you can divide by 350, instead of 365, if you need to divide by the number of days in the year. That is, remember that you choose the numbers, so pick nice round numbers that are easy to manipulate. Even if you just read a study that says there are 316 million inhabitants in the U.S., no interviewer will flinch if you estimate the number of American inhabitants as 300 million. The logic that you use to derive an answer from your assumptions is much more important than the perfect accuracy of the assumptions themselves.

4.?????Think of a funnel

When it comes to analyzing the guesstimate, the best approach is to think of a funnel. You begin by thinking broadly, then slowly narrowing down towards an answer. So, first, you have to locate the tip of the funnel. In the ping-pong ball question, when you’re looking for how many balls fit in a 747 airplane, your starting point is this:?the volume of a ping-pong ball.

5.?????Ask questions or make assumptions

For any guesstimate, if assumptions are fairly easy to make, then don’t ask your interviewer questions. If assumptions are difficult to make, or you run into difficulty assuming anything, then questions are okay to pose. In the ping-pong example, it seems fairly easy to estimate the ball’s volume. So, it’s likely unnecessary to ask: “What’s the volume of a single ping-pong ball?” In the case of this guesstimate, your verbal response/reasoning—and the beginning of your answer—might go something like this:?Let's assume that the volume of a ping-pong ball is about three cubic inches.

6.?????Don’t be afraid to ask for pen and paper

No one expects you to be a human calculator, so even if you’re estimating and rounding, you certainly can be writing down these?numbers as you develop them. Then you can do the math on paper, in front of the interviewer, which will further demonstrate your analytical abilities.

7.?????Put it altogether

Now that you understand the basic guidelines of how to answer a guesstimate, you’re ready to put your knowledge into practice. As an example of a good answer, here’s how the rest of an acceptable answer to the ping-pong ball guesstimate would go (let’s assume the answerer has pen and paper and is doing the math as she goes).

8.?????No correct answers

Always remember, no guesstimate question has a correct answer. No guesstimate question also has a correct approach. When you start solving a guesstimate question, your aim must not be to reach a correct answer or apply a correct approach. If the question you have been asked seems realistic—such as the market size of a particular good—do not believe that you will be able to reach the correct answer or anywhere close to it through guesstimating.

Guesstimate Interview Questions and Answers Examples:

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

First, clarify the question. Then, start solving.

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 occasion drinkers maybe once a week, and that of non-drinkers none at all.

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

Non – 0

Total = 6.5

Total cups per week = 6.5 x 1.6 crore = 10.4 crore

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2. How many iPhones are currently being used in India?

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.

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.

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.

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.

Calculating the proportion of the population that owns an iPhone –?

0.6 x 0.05 x 0.5 = 0.015

Total iPhones in India = 0.015 x 130 crore = 1.95 crore

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3. How many cars are there in Delhi?

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.

4. What is the size of the laptop market in the USA?

Make important clarifications such as the unit of measurement. Here, we shall assume that the unit of measurement is the number of laptops sold in a year.

The first step will be to make clear the USA’s population, which may be taken to be 300 million. Next, assume the proportion of this population that owns a laptop. The last determination will be the average span of the life of a laptop in the USA.

The USA population may be segmented into retirees, students, stay-at-home population, and working population. The working population may be said to be 50% of the total population. The retirees maybe 30% and students maybe 20% of the whole population.

Among the working population, it is assumed everyone owns a laptop. Among the retirees, a fair assumption would be that nobody owns a laptop. Among students, while younger classes do not require laptops, older classes do. So, half the students may be assumed to own a laptop.

Calculating the proportions of the population that own a laptop –

Working population – 0.5 x 1 = 0.5

Students – 0.2 x 0.5 x 1 = 0.1

Total – 0.6.

The average age of a laptop may be said to be 5 years. So, ? of the total calculated population will change their laptops every year.

The market size of laptops in the USA is 350 million x 0.6 x 0.2 = 42 million.

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5. How many ping-pong balls can fit inside a Boeing 747?

Begin by asking the interviewer the size of a ping pong ball. If you do not get an answer, assume a value.

To calculate the number of ping pong balls that fit inside a Boeing 747, we can begin by calculating the volume of a Boeing 747. First, assume the total number of seats on the plane. Then, account for the extra space—the aisles, the galleys, and the washrooms.

Conclusion:

Your aim while attempting guesstimate questions must be to be logical. The approach you take toward solving the question, and every step you take after the previous, must follow and seem to lead toward a correct answer. Additionally, do remember that it is highly unlikely that the interviewer knows the correct answer either. You are being assessed purely based on how you are tackling the issue.

Happy Guesstimating!