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Peek into the consulting interview

“Guesstimates”

Introduction to Consulting

- Consulting Club, FMS Delhi

Contents

Structure of the consulting interview 2

Understanding ‘Guesstimates’ ? 3

Types of ‘Guesstimates’ 4

Suggested approach and guidelines 5

Illustrated approach to a guesstimate problem 6

Solved Examples 7

Things to Remember 10

Contact us 11

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Structure of a Consulting Interview
Applicants to consultancy firms can expect to undergo several Guesstimates are an integral part of consulting interviews. They
interviews (typically three to four), each lasting 20-45 minutes. are tested in preliminary rounds or as a sub-part of a case study

20-30 min 30-45 min 5 min 5 min

Personals and Case Interviews Case Wrap Up

Start End
Guesstimate Presentation

Getting to know the

candidate better

Testing the logical and

quantitative skills of the
candidate

Key Focus

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Understanding ‘Guesstimates’ ?

What do you think is a ‘Guesstimate’ ? Yes! Do you know what you would
NEVER do to solve a guesstimate ?

Guesstimate = ‘Guess the estimate’ ? I’d never just GUESS! I’d SOLVE.

Guesstimate is defined as an estimate made without using or knowing adequate or complete information

The brainteaser or guestimate is a favourite assessment centre question. These seemingly random and ridiculous
questions asked during the interview process, boil down to (relatively) simple logic-based problem solving tasks while
keeping your calm.

So what do the interviewers want to see ?

• Ability to think on your feet
• Logical thought process
• Common sense
• Knowledge of things around you
• Numeracy skills
• Communication skills

The 4-steps Approach to solve a guesstimate

Step 1: Clarify the question, make sure you and the interviewer are on the same page on every assumption
Step 2: Break the problems into smaller pieces
Step 3: Use Estimation and Judgment to solve each pieces
Step 4: Consolidate all of those pieces into a final conclusion

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Types of Guesstimates

1. Estimating the ‘number of..’

3. Abstract
2. Market sizing
• Estimate the number of.. estimations
− light bulbs sold in India in a year
− songs downloaded each day

‘Start Small’ ‘Start Big’

approach approach • Estimate the market • Estimate the number of
size for basketball that can fill a
− bicycles in India Boeing 787
• Estimate the • Split and segment
− chewing gum in • Estimate number of
required figure for a the whole set as per
the US coins that can fill a
segment/unit and certain criteria
− newspapers in swimming pool
extrapolate to get /assumptions to
the whole. reach the desired Delhi • Estimate the number of
horses that can fill a
• E.g., paint used for set. • The volume-price
approach is useful for cricket ground
painting a single • E.g., Indian
house can be population can be a most market sizing
extrapolated to starting point for cases. Estimate the - There is no formula for
estimate annual estimating number volume transacted and these. Sit back, relax
Indian paint usage of 10th grade price individually, and rely on pure logic
students in India multiply for market size and common sense!

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Suggested approach and guidelines

•The most important component of solving your guestimate and the subsequent evaluation is the structure and approach you
used to solve the problem
•When given a guestimate, take two minutes to plan how you wish to proceed and the information you would need
Structure is the •The approach should be logical and complete to ensure you’re covering all necessary details, yet simple enough for you to
key make quick mental calculations

• The same guesstimate problem can be solved by different people using different approaches to arrive at different answers
• Its imperative for you to choose an approach that you are comfortable with and one that appears logical
•Make sure you are confident of the base assumptions and figures – e.g., for a ‘Start-big’ problem, you should know the
Choose your
population size and distribution
approach wisely

• All assumptions made must be elucidated to the interviewer. Sometimes the interviewer might ask you to use a different
assumption than what you suggest. No assumption is right or wrong, it just needs to be sellable !
• There should be a logical backing to each assumption you make. You can use prior research, popular occurrence or even
State your personal experience to defend an assumption. E.g., ‘I would assume that 30% of Indians are vegetarian – In my class of 50
assumptions people, there are close to 15 vegetarians’
clearly

• Always round off your numbers to closest multiple of 5 or 10 for simplicity. State that you’re doing that. Sometimes the
interviewer may want you to use the number as it is.
• Calculate as you proceed and pen down the calculation. It can get incredibly difficult to do the math in the end once you’ve
Use simple made a chain of complicated assumptions
figures and • At the end of your guestimate, try and make sense of your final answer and whether its accurate
calculate as you
go

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Illustrated approach to a guesstimate problem
How many minutes of mobile phone calls are made each day in Delhi?

1 Size the Market 3 Conclusion

Population of Delhi : 16 million
34 + 99 + 99 + 34 = 166 million
Estimated demographic audience : 10-70 year olds
(70-10)/75 = 80% (assuming average life span to be 75 years

Target market audience : 80% of 16 = 10.8 (take 10 million for 166 million minutes of phone calls are
ease of calculation) made everyday in Delhi

2 Population Split 4 Remarks

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Generally very limited time is given

to solve a guesstimate

It’s a good idea to break your
analysis into smaller parts to
1.7 3.3 3.3 1.7 enhance clarity. Interviewers
appreciate clarity of though to
10-20 yr 20-40 yr 40-60 yr 60-70 yr reach at final numbers

It is always suggested to have a
Average daily usage (mins) simple approach and take logical
assumptions that you can justify
20 30 30 20

You can always fine tune and check
numbers as the interviewer
Total daily usage(mins) suggests

1.7*20 = 34 3.3*30= 99 3.3*30= 99 1.7*20 = 34
It is always advisable to walk the

interviewer through your approach
as you move ahead with the
guesstimate; keep it conversational
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 Example 1
Estimate the number of one rupee coins that would fit in a normal sized room

1 Assumptions, reasoning and calculations 2 Remarks

• Let’s assume the dimensions of a normal size room to be as follows Abstract estimations are
• Height = 3m; Length = 4m, Breadth = 5m probably the most difficult type –
• Volume of the room = 60 m3 not because they are difficult to
solve but sometimes they are so
• The assumptions on the size of the room can be based on the dimensions random that they catch you off
of the interview room or any room in the vicinity (should be visibly guard
justifiable)
Keep your calm and think
logically – that’s the key to
getting these right
• Consider a one rupee coin to be a square of area 2cm * 2cm (Since when two
one rupee coins are kept adjacent, the space in between will remain unused and
Be careful to not miss out on
effectively, the space taken up by each coin would equal the space taken up by a certain obscure but critical
details in such estimations – e.g.
square of side equalling the diameter of the coin) account for space that will be left
• Some interviewers like to quiz candidates on the space that would be left unoccupied in the room because
unused due to shape of the object. Make sure you account for the same of the shape of the coin

These are mistakes that the
• Let the thickness of the coin be 2mm = 0.2 cm = 0.002m interviewer expects you to
make, a little bit of practice
• Volume of the coin = 0.02 * 0.02 * 0.002 = 0.0000008 m3 will help you avoid such
• Number of coins that would fit into the room = volume of room/volume of one errors
rupee coin (incorporated as a square) = 60/0.0000008 = 7.5 * 107

You are free to make reasonable
assumptions to simplify and
Answer: Number of coins that would fit a normal size room are 7.5 * 107
quantify such problems. Make
sure you spell your assumptions
out clearly and have the
interviewer’s approval

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 Example 2
Estimate the number of traffic lights in Delhi

1 Assumptions, reasoning and calculations 2 Remarks

• We know that Delhi is approximately 1600 sq.km in area. This is pretty much
Most guestimate questions relate
evenly divided between North, South, East and West to your country, city or place of
origin. The interviewer will frame
• Imagine Delhi to be a square area with dimensions 40*40 as length and
a question such that you would
breadth have some exposure to its
• This assumption can be justified with basic knowledge of map of Delhi tenants

Make sure you brush up
• We divide the entire city into blocks of equal area, hence, 20 blocks from east some important figures –
demographics, area etc.
to West and 20 blocks from North to South (with each block representing 2 sq.

Call out these numbers and
km) refer the source if possible –
• Visualize this as a checkerboard with length and breadth of 40km, split e.g. I recently read in XYZ
that 50% Delhites are below
into squares of side 2km
the age of 35 years

This not only makes your
• Every intersection of four adjacent blocks would give us a cross road. Each assumption sound solid but
crossroad would have a traffic signal. Hence, the number of signals at crossroads shows off your awareness
would be 400 across Delhi, averaging out for different areas.

Approach is key to getting these
guestimates right. The
• Since there are 400 crossroads in Delhi, the number of red light at each interviewer is interested in the
crossroad is 4. Hence, the total number of red lights at crossroads in Delhi is logic you use and how you
1600 defend it rather than the answer

• Further, assume that there are 20% additional traffic lights to the ones found at
Try and make sense of your final
answer. Does 1900 traffic lights
crossroads that are meant to control traffic on straight roads. These would
sound reasonable ? It amounts to
amount to ~300 red lights. 1.2 traffic lights per sq. km.
Looking at your surroundings,
Answer: 1900 traffic lights in Delhi does that make sense?
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 Example 3
Estimate the annual market size for denims in India

1 Target population set 3 Remarks

• India has a population of 1.2B, India has ~30% population living below the
Market sizing questions are very
poverty line. It would be fair to assume that a negligible proportion of poor common. Think of them as two
guestimates built into one – you
population wears denims
need an estimate of volume and
• Of the remaining 0.84B, approximately 50% fall in the age group of 6-35, the an estimate on price
core denim wearing population. This amounts to ~0.42B people
Typically, your volume
• Of these, assuming equal distribution between sexes, there are ~0.21B males estimate will be more
and ~0.21B females elaborate, so try and tackle
that first

After you’ve worked out
2 Assumptions and valuation volume, you’ve hopefully
• Here we assume that 80% of men buy atleast single denim in a year and atleast already impressed the
interviewer and he will
50% women buy single denim. accept a simple assumption
• Let’s divide the population further into high income, middle income and low for price
income groups. Assume high income is 10%, middle income is 60% and low
income is 30% Assume that the high income group buys 3 denims per person per
Practice a few such questions
year; before your interview. Think of
objects around you and try and
middle income buys 2 denims per person per year, low income buy 1 denim per build an approach as to how
person per year. you’d obtain a market size for
• Calculating, male denims bought = 0.8*0.21*(0.1*3 + 0.6*2 + 0.3*1) = them. The Start Big approach
0.8*0.21*1.8 = 0.3B; calculating female denims bought = 0.5*0.21*(0.1*3 + works for most volume
estimations for market sizing.
0.6*2 + 0.3*1) = 0.2B. Thus, total = 0.5B
• Assume the average price per denim to be 1000Rs; Thus, market size = Rs. 500B
• Average price can be justified as: Averaging for branded products in the
1800Rs pus range and non-branded in the ~500Rs. range
Answer: Market size of denims bought in India is ~Rs. 500B
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Things to remember - Start Preparing!!!

Essentials you need to know to help you in solving Guesstimates

1 Population of India and other demographics

Segregation in % terms of

Rural / Urban population

Male / female population

Median age of India and age wise segregation

2 Population of Delhi / your hometown and other demographics

3 About Delhi metro : Number of lines, timings, average turnout, etc

4 Area of Delhi / Kamla Nagar / your locality

5 About Delhi University : Number of colleges, students, etc

6 About FMS : dimensions, number of rooms, area, volume, etc

Most Importantly general knowledge and

common sense… 10
Consulting Club Contacts

Team Conclub Members

Arush Singhal arush.s16@fms.edu +917042592113

Avneesh Bansal avneesh.b16@fms.edu +917042596215
Bodhisatva Gautam bodhisatva.g16@fms.edu +917042596217
Jayant Dalmia jayant.d16@fms.edu +918447408409
Kanav Mayar kanav.m16@fms.edu +919953586563
Siddharth Shandilya siddharth.s16@fms.edu +917042639485

Others

conclub@fms.edu

https://www.facebook.com/TheConsultingClubFMSDelhi

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