Guesstimate — A Thinking Approach
How many ping-pong balls can fit into a Boeing 747? — The kind of question that can make even the most prepared candidates to panic. Rest assured, even the person asking the question doesn’t know the exact answer. All he/she wants to analyse is the approach that you take to make reasonable, logical assumptions to arrive at the answer, hence the term ‘Guesstimate’.
As Guesstimating has become a vital skills for Data Scientist and MBA interviews, I have tried to attempt a case study to see how far I have grasped the necessary approach.
WHAT WAS THE REVENUE FOR FLAT SCREEN TELEVISIONS SOLD IN MALAYSIA IN THE PAST 12 MONTHS?
Population of Malaysia = 32,000,000
Assuming each household consist of 4 individuals,
Number of households = 8,000,000
Poverty rate in Malaysia = 5% = 400,000 households
Excluding those below poverty rate, assuming those 7,600,000 households would have at least one television. Therefore, 7.6 million televisions
Assume households replace their televisions every 4 years.
Thus, 7.6 million TVs /(4 years/purchase) = 1.9 million purchases last year
A Flat TV can cost anywhere beginning from RM 1000. Let’s take an average cost of RM 1500 per TV.
9 million * RM 1500 = RM 2,850 million ~ RM 2.9 billion
The above approach contains a lot of assumptions and simplifications, which are necessary to arrive at the answer for Guesstimating questions. You just need to spell them out loudly during your interview and adjust the assumptions, if necessary.
I will add more interesting case studied in this article as I keep on working on them.
Thank you for reading.