Approach to
Guesstimates.!
Definition
Basic meaning of guesstimates:
• An estimate based on a mixture of guesswork and
calculation - Guess + estimate .
• Always remember it is about the approach used to
reach the number and not the final number.
Can I consider everything.?
• Choosing factors that you can derive or guess
about based on some top-of-the-house numbers
that you already have
• Excluding any factor that is an exception to the rule
or doesn’t make a significant difference to the
No – simplify approximate amount
your life by: • Reading the problem statement again – what do
you really need to calculate (eg. Kgs of surf used,
bought, sold or manufactured)
Clarify.!
Before attempting the
question itself, see if
there’s anything the
evaluator can clarify that
will allow you to narrow
down the scope of the
consideration
Don’t
• Looking at a question and thinking, ‘I
don’t have any data or information
about that. There’s no way I can crack
this.’
• Instead, work with the numbers you
already have and using deductive
thinking, develop the most direct
connection you can between your
umbrella number and the final
estimate required
Let us try solving this:
Can you estimate the amount of surf excel powder used in India
per day (in kg)?
Frame work
Mutually Exclusive, Collectively Exhaustive (MECE)
It is a method of grouping information into elements
that are mutually exclusive (ME) and collectively
exhaustive (CE).
Method
Think of all the factors that affect the numbers of
whatever you’re calculating and categorize them into
buckets that follow the MECE framework.
For a defined structure you can have broad categories like
demographics, Psychographic and attributes.
Structure
Demographics Psychographic Attributes
• Location • Brand affinity • Changes
• Age • Brand according to
• Income perception the problem
• Gender • Spend capacity statement
• Race/ethnicity
• Occupation
Demographics
Location Age Income
• Rural • Minor • High
• Urban • Adult • Medium
• Senior citizen • Low
Gender Occupation
• Male • Unemployed
• Female • Blue collar
• Other • White collar
Psychographic
Brand Affinity : Likelihood that the customer will stick with
the same brand.
Brand perception : Customers opinion on the brand it might
be positive, neutral or negative.
Spend Capacity : Customer’s ability to spend on the product
or the service.
Attributes
These keep changing according to the question.
They are nothing but the personal choices
Can you estimate the amount of surf excel powder used in India per
day (in kg)?
LETS BE MORE DILIGENT THIS TIME
Solution 1B
Population of India
0.7 0.3
Rural India Urban India
0.6 0.3 0.1 0.6 0.3
0.1
Low income Medium Income High Income Low income Medium Income High Income
0.8 0.2 0.3 0.7 0.4 0.6
Not surf Not surf Not surf
Surf excel Surf excel Surf excel
excel excel excel
0.3 0.7
0.4 0.6 0.7 0.3 Not surf
Not surf Not surf Surf excel
Surf excel Surf excel excel
excel excel
Calculations
• Now, with the help of assumptions made calculate the final number
100 crores
7000000 3000000
4200000 2100000 700000 300000 1800000 900000
840000 1260000 490000 90000 1080000 630000
Total= 4390000
Calculations
• Now, further assume each person uses 50grams of surf excel per day
• That means,
• 4390000 * 50 = 219500000
• But the question asks for surf excel used per day in kgs.
• As 1000grams = 1 kg
• So, now 219500000 / 1000 = 219500
• The solution is 2,19,500 kgs of surf excel is used per day in the country.
Presenting your solution
Start by stating your umbrella assumption/number
Clearly state the factors you’re considering within your solution
• Preferable to stating these one by one
Also state the factors you’re excluding from consideration and why
Use round numbers
