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Analytics PrepBook AnSoc 2017 PDF
Analytics PrepBook AnSoc 2017 PDF
Index
1
Index
1 Preface 3
3 Interview Experiences 7
3.3 VISA 19
4 Guess Estimates 32
4.1 Fundamentals 33
2
Preface
Dear Reader,
The domain of analytics is quickly gaining popularity across corporate firms worldwide. From a
subject which was prominently deployed in research projects in the 19th and 20th century to
becoming a major driving factor for Donald Trump to win the most prestigious elections in the
world, analytics has surely come a long way. Its importance has scaled to such an extent that
firms which are not utilizing its capabilities in any of its operations are bound to lose out in the
long run. Hence corporates are either building their own indigenous analytics capabilities or
leveraging the services of prominent analytics firms for their flagship projects. Intuition is
slowly taking a backseat and every decision gets scrutinized through the lens of analytics.
As a result, managers who have the technical know-how of analytics combined with the grit to
lead capability development activities in this field are in great demand today. This demand
would grow exponentially as more and more firms push themselves to develop such
capabilities. Increase in the number of analytics profiles visiting top B-Schools is hence not a
mere coincidence. With this thought, the Analytics Society aims to keep students of IIMB ahead
of the curve by inculcating the motivation to learn analytics and provide the requisite tools at
all stages.
As an effort in this direction, we present to you a compendium that can help you prepare for
your placement interviews. It is a three-part booklet with the first part focusing on prominent
analytics definitions and terminologies which are ‘must to know’ for any analytics interview.
The second part discusses past analytics interview experiences during final and lateral
placements of IIM Bangalore PGP students from the batch of 2015-17 and 2016-18. The final
part focusses on techniques on solving guess estimates and sample scenarios across the same
interviews. We would like to thank all the alumni who shared their interview experiences with
us.
We hope you find this useful. All the best for your interviews!
Thanks,
The Analytics Society of IIM Bangalore
Follow us on:
3
‘Must-Knows’ for Analytics Interviews
4
• Bias – Statistical bias is the error you cannot correct by repeating the experiment many
times and averaging the results together
• Big Data - Extremely large data sets that may be analyzed computationally to reveal
patterns, trends, and associations. These differ in terms of velocity, variety, and
veracity.
• Normal Distribution – A probability distribution which, when graphed, is a symmetrical
bell curve with the mean value at the center. The standard deviation value affects the
height and width of the graph.
• Sampling – Sampling is a process used in statistical analysis in which a predetermined
number of observations are taken from a larger population. The sample should be a
representation of the entire population. When taking a sample from a larger
population, it is important to consider how the sample is chosen. To get
a representative sample, the sample must be drawn randomly and encompass the
whole population.
• Sampling Fundamentals –
o Statistics and Parameters – A statistic is a characteristic of a sample, whereas a
parameter is a characteristic of a population
o Sampling Errors – Statistical errors because of using a sample population rather
than using the whole population
• Hypothesis Testing - Hypothesis Testing is an assumption that we make about the
population parameter.
o Type 1 error – Also known as false positives, it is a rejection of null hypothesis
when the null hypothesis is true
o Type 2 error – Also known as false negatives, it is the inability to reject the null
hypothesis when the null hypothesis is false
• Linear Regression - A technique to look for a linear relationship (that is, one where the
relationship between two varying amounts, such as price and sales, can be expressed
with an equation that you can represent as a straight line on a graph) by starting with
a set of data points that don't necessarily line up nicely.
• Multiple Regression - Multiple regression is an extension of simple linear regression. It
is used when we want to predict the value of a variable based on the value of two or
more other variables.
• Principal Component Analysis - This algorithm simply looks at the direction with the
most variance and then determines that as the first principal component. The principal
component analysis is a dimension reduction tool that aims at reducing a large set of
variables to a small set that still contains most of the information.
• Factor Analysis – It is a statistical method to reduce a large number of variables into
fewer numbers of factors. The algorithm leverages variability among observed,
correlated variable and reflects their variations in the lower number of unobserved
variables. The observed variables are modeled as linear combinations of the potential
factors.
• Clustering - An algorithm for dividing up data instances into groups identified by the
execution of the algorithm because of similarities that it found among the instances.
5
• Logistics regression - Logistic regression is used to describe data and to explain the
relationship between one dependent variable and one or more independent variables.
• Random forest - A random forest is an estimator that fits some classical decision trees
on various sub-samples of the dataset and use averaging to improve the predictive
accuracy and control over-fitting.
• Chi-Square Test - Chi-square is a statistical method used to test whether the
classification of data can be ascribed to chance or some underlying law. The chi-square
test “is an analysis technique used to estimate whether two variables in a cross-
tabulation are co-related. “A chi-square distribution varies from a normal distribution
based on the “degrees of freedom” used to calculate it. Chi-Square distribution is the
distribution of the sum of squared standard normal deviates. The degrees of freedom
of the distribution is equal to the number of standard normal deviates being summed.
• Mean Absolute Error - The average error of all predicted values when compared with
observed values.
• Mean Squared Error - The average of the squares of all the errors found when
comparing predicted values with observed values. Squaring them makes the bigger
errors count for more, making Mean Squared Error more popular than Mean Absolute
Error when quantifying the success of a set of predictions.
• Standard deviation - The square root of the variance, and a common way to indicate
just how different measurement is from the mean. For a normal distribution
observations, more than three standard deviations away from the mean can be
considered quite rare.
• Variance - It is frequently used in statistics to measure how large the differences are in
a set of numbers. It is calculated by averaging the squared difference of every number
from the mean.
• P value – A probability that provides a measure of the evidence against the null
hypothesis given by the sample. Smaller value indicates more evidence against H0.
• Poisson Distribution – The Poisson probability distribution describes the discrete
random variable that is useful in estimating the number of occurrences over a specified
interval of time or space. For example, the number of repairs needed within 10 miles
of highway, number of leaks in 100 miles of pipeline.
6
• T distribution – A family of probability distributions that can be used to develop an
interval estimate of a population mean whenever the population standard deviation is
unknown and is estimated by the sample standard deviation.
• T value – T values are used in wherein the sample size of the hypothesis test is less than
30. The procedure that calculates the test statistic compares your data to what is
expected under the null hypothesis.
• Correlation - Correlation analysis is a method of statistical evaluation used to study the
strength of linear relationship between two, numerically measured, continuous
variables.
• Covariance - Covariance is the expected value of variations of two random variates from
their expected values. It is a measure of how changes in one variable are associated
with changes in a second variable. A positive correlation means that higher values of
one variable are associated with higher values of the other variable.
• R2 – Coefficient of determination is the proportion in the variance of the dependent
variable that can be predicted from the independent variable. In regression, the R2
coefficient of determination is a statistical measure of how well the regression
predictions approximate the real data points. An R2 of 1 indicates that the regression
predictions perfectly fit the data.
• Time series data - A time series is a sequence of measurements of some quantity taken
at different times, often at equally spaced intervals.
7
Interview Experiences
8
American Express Interviews
Interview 1
Name: Gouthami N
Interview experience:
The first round was based around Gouthami’s learning during Business Analytics elective
course and her internship experience. The second round was a case-based round.
Round 1:
Interviewer Please tell me about your intern experience and the details of the project.
Me Explained the project in brief along with the scope of analytics used in the
interview
Interviewer Have you taken the Business Analytics elective offered in the campus?
Me Yes
Interviewer When do you generally use linear regression, and can you explain the basic
steps?
Interviewer What do you know about Clustering and Principle Component Analysis? Can
you talk about various types of Clustering?
Me Clustering is used to figure out what groups do the data points fall into, to
gain insights from the given data set.
9
There are mainly 5 types of clustering are – K-means clustering, Mean-shift
clustering, Density based spatial clustering of applications with noise,
expectation maximisation clustering using Gaussian mixture model and
Agglomerative hierarchical clustering
Round 2:
Imagine that you are the HR in a leading company (L&T). You are assigned a
task to estimate when a person is going to resign, basically figure out the
attrition rate of the company. Also, what all factors would you consider for
Interviewer the same
The attrition of people depends on various factors – duration of work ex, last
promotion, last raise, payment difference, feedback. Different weightage will
Me be assigned to individual factors to reach to an optimal valuation.
Analyst’s Corner
Gouthami is currently working as a Risk Analyst. The team composition varies depending on
the vertical. The growth path for an analyst at American Express is typically
Strat Analyst → Assistant Manager → Manager → Senior Manager → Director → VP
Gouthami is currently working on short term projects as she is working with the New Accounts
Team. Her current project is around designing a process to accept or reject the application
while optimizing the rules for the same. She uses SAS and Excel in her team, however, certain
teams also use Python especially the Decision Science Team. She is happy with her profile and
the culture of the company.
10
Interview 2
Name: Vignesh S
Company: American Express
Placement Batch: 2015-2017
Background: Worked Experience at Texas Instruments for 4 years
Rounds: 2 interview rounds preceded by a GD
GD round
Topic of GD: "There’s an online credit card transaction. Give ideas to detect if it’s a fraud or
not"
8 people/ 30 minutes (Moderator asking ques on whatever you tell)
11
Interview 3
SECOND ROUND
Time: 30 mins
12
Factors like location, work/college, mutual friends, recent
Me interactions, part of same groups etc
(and mentioned 4-5 more factors)
Interviewer <Seemed convinced> How do you rank them?
<Ranked them and justified why did I do so> He wasn’t looking for a
Me specific answer. Just wanted to see how do you define the ranking
order based on your preferences.
Interviewer How do you practically implement it?
Told them we can create a dataset with all factors and using past data,
Me build candidate models and then predict who are more likely to
become a Facebook friend.
Okay. We will move to the next case. Let’s say Airtel can share all the
customer information with American Express. Assume there is no
Interviewer
regulation restricting this. Suggest at least 5 parameters which
American express can use to identify prospective premium customers.
Me I would first consider the default in payments historically
I don’t think so. That would just show you how credible he is. Could
Interviewer
you think of other factors?
Yes, we can look at the locality in which he lives in, places he travels
Me to, online purchases he makes, the bank account balance and the
proximity with other premium customers
<Interviewer seemed impressed with the proximity factor>
Interviewer
Yeah, you are correct.
Overall, the interviewers seem to value ideas and thinking about all relevant factors in a
problem.
13
Interview 4
Number of Rounds: 2
Interview Experience:
The case round lasted for 40 mins. First round was focussed on the case. The second one was
more general with very basic probability kind puzzles and general HR questions.
14
We will segment our customers as organizations/businesses and
individuals. We can then look at the various data points. A target is
one which can take heavy credit on credit cards and pay it.
Assuming, we have access to the message history, we can see the
amount of transactions that take place, how frequent it is, what
kind of transactions are these, with whom are these transactions
Me (where do they buy from if anything), etc. (this is not the
comprehensive list that you can come up with). Once we have this
data, we can slice and dice the same to come to the segment that
is high potential, primarily through the amount and frequency of
transactions and by identifying any particular vendors that are
indicative of good credit history. This will lead us to our target
customer.
Analyst’s Corner
Ramya claims:
“For an analytics profile like Amex, it is a great plus to have work-ex or project that relates to
Analytics. It is important that a genuine interest and awareness of the field comes across to
the interviewer. Overall the interview difficulty level is medium-low, and a good preparation
goes a long way in converting the call.
For preparation, a general consult case prep is useful as it helps you be more structured and
approach problem solving in a logical manner. MECEing at every step is important to make sure
you have covered all aspects since we are dealing with data here. In addition, a thorough
preparation of the relevant projects and experiences is handy in the interview. Revision of the
concepts from DS2 and DS1 is also needed as you can drive the conversation towards aspects
of analytical problem solving wherein regression and other tools come in handy.
Prepare guestimates, HR and resume based questions. There's one round of GD before
interview so need to be good at group discussion as well”.
15
Goldman Sachs-Strats Interviews
Interview 5
Rishi had prior experience in financial trading and analysis during his tenure at Reliance Risk
Management and Futures First
Interviewer Interviewer asks some basic question on scenarios based on algorithm building
16
<The interviewer asks few ‘Let’s say…..’ questions. One such instance is as
follows:>
Interviewer
If you were assigned the responsibility to maintain a portfolio, what checks
would you do?
I would start with the basic test of performing the horizontal analysis of the
Me past analysis of various components of the portfolio. I would further dive deep
by performing Value at Risk (VaR) analysis and Efficient frontier analysis.
Analyst’s Corner
Rishi currently works as an analyst in the data governance team, primarily dealing with flaws
in data automation and input for running the algorithms. He mainly uses Microsoft Visio and
Tableau as the Data analysis tools apart from using GS’s own ‘Slang programming language’.
He currently works on short term projects on data governance for the modelling and
calculations team, making frameworks on a sprint-to-sprint basis. He currently rates nature of
problems as ‘Good’ and Organization culture and Learning Opportunity as ‘Very Good’.
17
Interview 6
Name: Dheeraj Agarwal
Company: Goldman Sachs- Strats Division - Analyst
Placement Batch: PGP 2016-18
Background: 34 months of work experience in NHAI (semi-governmental organization)
Interview Rounds: 3 Rounds, 2 Rounds Technical, 1 HR
Interviewer Why do you think you will suit our work culture?
Me Understanding the job profile is very important here. I have answered
the question with few of my strengths. I am self-motivated person and
would like to work hard to reach beyond other expectations.
Interviewer What two or three things are important to you in your job?
Me Value addition, a wide canvas to explore and some flexibility to choose
the tasks that I find indulging, interesting and challenging.
Interviewer Assuming that you could do anything, you wanted, what would you
really like to do in life?
Me I think I would go for either stock trading or will be involved with
gambling games. You can really talk about your other hobbies here.
Interviewer Your present company has given promotions has given promotions and
always recognized your performance. Still do you want to save it?
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Me Answered this question in balanced manner, having an optimistic
approach and frame the answer accordingly.
Analyst’s Corner
As per Dheeraj, the interviews are purely based on basic-level finance and coding knowledge.
It is advised to read the book – ‘Third in wall street (100 puzzle book)’. He says internal mobility
is good in GS Strats and there is good chance of bagging PPO. Courses like ‘Risk Management’
and ‘Financial Derivative Investment courses’ are an added bonus to this profile. Dheeraj says
that he revised all financial concepts of these courses before the interview. The given two
courses follow Hull text book which gives great insights on finance concepts and trading
strategies.
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VISA Interviews
Interview 7
Let’s start with the first case. Visa is developing a new credit card for the
Interviewer millennials. What factors would you consider for introduction of this card in
the market?
Analyzed the customer behavior in this domain. Millennials generally utilize
their credit cards across shopping centers, paying utility bills, gas stations etc.
Me
Let me assume an average total transaction of 2-3 lakhs per annum per
customer
Interviewer Sure, Go on
I utilized the New market entry framework to probe the problem. He
structured the problem on the following parameters- income levels, usage
Me
levels across above utility parameters, frequency and amount of annual
transactions
Let’s discuss another short case. What all avenues can VISA explore in India for
Interviewer
generating more revenue?
20
The second round was a HR based round. I was prominently asked questions related to his
internship project at Amazon. I was asked further questions to check for fit and suitability for
the role.
Analyst’s Corner
Lakshya’s preparation was mostly focused on consultancy related roles. He believed that his
case preparation was very useful for analytics related interviews as well. Apart from VISA, he
also interviewed with EXL Services and Accenture.
He states that people having prior work-experience have an advantage for VISA interviews and
workshops such as those related to R-Studio can be useful as well.
21
EXL Services Interviews
Interview 8
Interview Rounds: 3 Rounds, 2 Technical Rounds, 1 HR round to check suitability for role
We are going to solve a guest estimate in this round. Your task is to analyze
how many Maruti Cars are sold in Bangalore. You need to provide me a
Interviewer
structured approach, taking reasonable assumptions wherever needed and
arrive at the closest number
<This was a basic case study question> I started with the basic assumption of
Me Bangalore’s population and number of households in Bangalore
I had revised the annual income levels of people in Bangalore, using which he
Me estimated people who would be eligible to own a car. He further divided the
households on the number of cars owned.
Can you please provide me the product portfolio of Maruti cars in Bangalore
Me
and its effective market share in each segment
Provides the product portfolio (Cars, Price, Segments) for Maruti. Provided
Interviewer him total market share of Maruti in India and asked him to make reasonable
assumptions for Bangalore
I made assumptions based on affinity of Maruti cars in urban vs rural India and
Me attributed market shares in each of the segment according to his prior
knowledge. I asked the interviewer if he was Ok with the same.
22
Interviewer Please go ahead. I am Ok with the assumptions
I then further analyzed the problem deeper and came up with the solution.
Me
The interviewer accepted the solution and asked me if I had any questions
My internship project was based on Big data analysis for an Auto parts
manufacturing MNC. I worked on a solution on inventory management and
Me
used visualization tools such as Tableau. I developed an automated solution by
linking his dashboard through a hive database network for periodic refresh
<After asking some probing questions on Inventory management solutions,
Interviewer customer segmentations and Hive bigdata storage solutions>
Interesting work!!! Let’s move on to solving a short case study
Me Sure Sir
Sure, It seems like a highly concentrated oligopolistic market in India. Who are
Me the primary customers of the industry? Who are the major competitors and
their market shares?
You can limit your analysis to students of classes 11th and 12th. There is one
primary competitor in the market. There is one more prominent player who
Interviewer
recently started its operations in India three years back
23
I used the sheets allotted to him to break down the problem into
Me Profits = Revenue – Cost. I then used this methodology to probe the problem
statement further
I asked for more information regarding major regions of revenue and whether
Me the company is undergoing planned expansion, given that online education is
a new domain in India
I asked the interviewer about if the two new competitors have adopted new
Me
strategies to win the market share recently
Analyst’s Corner
Vishnu was easily able to explain the technicalities associated with the role and his project
results.
Vishnu rates his project at EXL very highly, being given a couple of good short-term high-priority
projects in his first initial months itself. He rates the team culture a 5/5 for the learnings being
imparted to him. He claims that there is no scope for spoon feeding in his role and that the
employees would get ample training opportunities on the go.
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Interview 9
Round-1
Time: 20 min
Tell one interesting thing which you are proud of in IIMB? Other HR
Interviewer
questions like what you like at IIMB?
Interviewer What are the relevant subjects you have taken in IIMB?
Since you mentioned numbers tell the product of 196 and 214? (Then he
Interviewer asked cubes of some numbers etc. to check how comfortable with
number)
He was looking at speed in this question but it was highly important to get
Me
the cubes right
Interviewer Since you have interest in finance can you tell the TCS buyback amount?
Me 16,000 Cr
Let’s do a guesstimate. Company is releasing a new bulb which has a
Interviewer lifetime of 3 years. We don’t have a product like this before. So how do
you decide on pricing?
This can be done on cost basis or value basis.
Cost basis: Take the manufacturing costs of the product and add a profit
margin.
Value basis: Calculate life time savings (3 year) for a customer that can be
Me
obtained by using this bulb compared to regular bulb and add that to the
price of regular bulb. This extra benefit customer will be willing to pay.
They asked me to proceed with value basis, because we don’t have
information on profit margin.
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Round-2
Time: 30 min
It’s mostly technical. They have asked detailed questions on 3 Analytics projects candidate
had done in IIMB and 2 guestimates. (From CCS and AMDA)
Guestimate 1
Interviewer
Suppose Bangalore is starting a metro. How do you decide on capacity?
I started from demand side and took population of Bangalore as per age
groups (Say 0-15, 15-25, 25-40 and >40 years). Then estimated what
percentage of population are using their own vehicles (2 wheeler and 4-
Me
wheeler), public transport and other forms of transport in this age
groups. Then estimated how many of them would shift to Metro from
these modes.
Guestimate 2
Interviewer What about Delhi metro which is running currently? How many people
are travelling by metro?
Here, it should be calculated from supply side.
Total Capacity = Capacity of each metro * No of times metro will run each
day * Capacity utilization.
Me Capacity of each metro is calculated taking 6 bogies.
No of times metro will run each day is calculated by taking 5 min avg.
time per a metro in busy time and 10 min avg time in rest of the day.
Capacity is taken 100% during busy time and 80% during rest of the day.
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Interview 10
Divide Bengaluru into 3 distinct regions – Roads (40%), Residential (30%) and
Me
Village/Forest land (30%)
Interviewer Go ahead…
Assumed the Total Area of Bengaluru city to arrive at the area covered by
Me
roads.
Further divided roads into 3 categories: Main roads (high on traffic), service
Me
roads and low traffic residential roads
The roads of interest would be the main roads as these are the ones with
street lights. I would find the density of traffic on these roads and define the
Me
frequency of street lights accordingly. This would enable us to arrive at the
final figure
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Interviewer Tell me something about yourself?
Answered the prepared strength and weakness with example from personal
Me
life
Interviewer State an occasion when you took a moral high ground under intense pressure
Me Cited an example from my life where I took a stand for what was right
Interviewee Answered the prepared long-term plan (Be specific in such questions)
Analyst’s Corner
Rahul informs us that the courses Prof. Sandeep Kumar’s course on Business Analytics was of
immense help for his interview. Alongside, he prepared well for guess estimates & puzzles.
Coding knowledge was not a prerequisite and he was not probed on the same in the interview.
Rahul currently works on project dealing with analyzing data in the Insurance domain. He is
responsible for managing the overall impact of the project, with 2-3 subordinates reporting to
him. Projects are generally short term, data analytics oriented. He frequently uses tools such
as SAS, Knowledge Seeker, VBA language.
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United Health Groups Interviews
Interview 11
Name: Kausik Tamuli
Company: United Health Group – Analytics Manager
Placement Batch: 2016-2018
Background: More than 3 years of work experience at TATA Steel in project management
Interview Rounds: 3 Rounds, 2 Technical Rounds, 1 HR round to check suitability for role
Positions Offered: Manager, Analytics (for >3 years’ work experience)
Lead Analyst (for <3 years work experience)
Interviewer You have a large database, what insights can you bring to management?
<This was a basic case study question, this is a typical question companies with
huge database ask>
Me I first asked what kind of datasets he is looking at to understand if he had a
specific answer he was looking for. Also, I was trying to see if I could control
the direction of the interview
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For ex. Sales team will use the data for sales forecasting, incentive
Me compensation, etc. marketing for segmentation, targeting etc. product
management team for campaign impact analysis.
Explained briefly one of the analytics projects I did as a part of the course I had
Me
taken
Asked about one of the decisions that was taken (current affairs topic) and its
Interviewer
impact
Answered briefly. The interviewer was checking general awareness about the
Me
current affairs. Wasn’t looking for in depth information.
Analyst’s Corner
According to Kausik, the work-life is balanced with approximately 8 hours required per day.
The growth and learning opportunities are sufficient.
Kausik suggests that candidates interested in analytics roles should choose ‘Business Analytics’
elective course offered in 3rd semester and refer various casebooks such as IIMB and IIMA
casebooks and Case interview cracked.
30
Interview 12
Name: Abhijit Khonde
Company: United Health Group – Analytics Manager
Placement Batch: 2016-2018
Background: 24 months’ work experience in Shapoorji Pallonji (Deputy Manager)
Interview Rounds: 3 Rounds, 2 Technical Rounds, 1 HR round to check suitability for role
31
Round 3: Technical Interview: 15 min
Tested on basic coding skills on R and Python languages.
Analyst’s Corner
Abhijit says that UHG is growing at a fast pace. The role offered apart from catering to various
analytics projects and brings about numerous consulting related projects. The most relevant
courses at IIM Bangalore are those of Prof. Dinesh Kumar (BAI), Prof. Mallay Bhattacharya
(AMDA) and Prof. Avinash Mulki (Research and Development)
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Guess Estimates
33
Fundamentals
Since most of the analytics interviews concentrate on guestimates, let’s revise these
concepts.
To determine which approach to use, see which of the two sides is constrained. Use that
side to estimate the number. For example, to calculate number of people travelling in Delhi
metro, supply side (capacity of metro) is constrained and therefore the guesstimate has to
be done from supply side. However, if we need to plan the capacity of a new metro,
demand needs to be gauged.
From the demand side, a product can be replaced every few years. This can change the
demand of the product. For example, car tires can be replaced. So, a replacement factor
can be used to determine the demand of tires. A product can be reusable, which decreases
the demand. For example, taxis can be used throughout the day, which needs to be
discounted before calculating the total number of cabs needed in a day.
• Segmentation
As the demand varies across various segments, segmentation needs to be done while
solving the guesstimate. Examples of segments are income bracket, age, rural/ urban,
gender.
To determine the number of cars, income bracket could be used as the higher income
people use cars more. To determine the number of cigarettes, gender segmentation could
be useful. On the same lines, to determine number of burgers made in India, rural/urban
segmentation could prove to be helpful.
The utilization of a product need not be 100% and it can vary across the time. For
example, the occupancy rate of a taxi in peak time would be 100%, whereas in the non-
peak times, it could be 80%. However, the occupancy rate depends on other factors
34
also like weekday & weekend.
b. Conversion rates
This is useful in running marketing campaigns, to determine the target number of
customers.
Some basic figures that would help if kept at your fingertips are:
Population of India 120 crores (can take as 100 crores for ease of calculation)
Rural: Urban Split (India) 70:30
Average family size 5 people
Male: Female ratio 50:50s
Upper: Middle: Lower Class 10: 40:50
split (India)
Question
How many people wear red in New York on a typical Monday?
Solution:
• Step 1 – Clarification:
If a person wearing red goes out more than once, do we count them again? – No!
Does “New York” here refer to New York City or the state of New York? – New York City
These following questions would help us determine the number of people wearing red in
NYC on a typical Monday:
How many people are there in NY? What are the chances that people would wear red?
This depends on two primary factors: How many components of clothing do people wear
and their colour preference.
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• Step 3 – Solving each piece:
Work with the interviewer to estimate each of those elements and come up with the
answer.
• Step 4 – Consolidating:
Let’s analyse the number of people wearing red from each group.
• Staying at home: 1,000,000 * 2 * 1/10 = 200,000. 1,000,000 people have two pieces
of clothing. Chance of having red in each piece: 1/10 (7 colours + grey + black +
white)
• Going out once: 14,000,000 * 5 * 1/20 = 3,500,000. 14,000,000 people have five
pieces of clothing. Chance of having red in each piece: 1/20 (on Monday, most of
these people go to work. Thus black and white will be the main colours they wear)
• Going out twice: 5,000,000 * 10 * 7.5% = 3,750,000. 5,000,000 people have ten pieces
of clothing. Chance of having red in each piece: 7.5% (the first trip is probably to
work: 1/20; the second trip is the casual trip: 1/10)
So, in total, there are about 7.5 million people in NYC wearing red on a typical Monday.
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• Type of ping-pong ball – measurements (don’t ask directly, assume something and
confirm with the interviewer)
• Type of Boeing 747 – measurements (don’t ask directly, assume something and
confirm with the interviewer)
Step 2 – Breaking down the problem:
Expert Notes
The numbers in the above question are not essential, but it becomes dangerous when
assumptions are way off the mark. Let's say in the above question, you take the side of ping
pong ball to be 3 m instead of 3 cm, it clearly shows the lack of knowledge of measurement.
Numbers like the ‘Number of seats’ in Boeing can be guessed with prior experience, and if you
don’t have the relevant experience, please do ask in the interview for help – it does not any
lack of capability, in fact, it shows you are willing to ask for help when stuck in work which is a
necessary quality one must have.
Question 2
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You are in a meeting with a client who mentions that she is considering building a new plant.
The new plant will require 100 million tons per year of recycled aluminum as an input. Your
client turns to you and asks you if there is 100 million tons of recycled aluminum available in
the US on a yearly basis. You do not have that information of the top of your hearing. How can
you answer the question on the spot?
Solution:
Step 1 – Clarification:
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More Sample Guestimates
This can be done from demand side. Let’s start by estimating car market in India.
After estimating number of cars to be about 4.2 crores in India, tire market needs to be
estimated. The demand of tires can come from both new cars and replacements.
Suppose, life time of a tire is 3 years and life time of a car is 10 years.
Hence, the total demand for tires in India is 3.5 crores per year.
Estimate the number of flights taking off from Bangalore in a day
There are 2 types of flights flying from Bangalore- Domestic and International.
Let’s assume we need to estimate only domestic flights from Bangalore. There is higher
traffic for Tier-1 cities and lower traffic for Tier-2 cities. Hence, the segmentation is done
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accordingly. It is assumed that there are about 10 tier-2 cities to which Bangalore has direct
connectivity. Since, Delhi and Mumbai have higher capacity, tier-1 cities are again divided
into 2 categories.
The occupancy rates depend on the timing of the day. Suppose, there are 2 busy periods in
morning and evening each for 3 hours. Further, the first 4 hours (12 AM- 4 AM) airports have
lesser traffic and it is safe to assume as non-operational hours. Hence, the rest 14 hours is
non-peak hours.
For example, there are generally 4 flights every hour in peak time (for 4 major airline players)
for Delhi.
In total, there are 90 flights for Delhi, Mumbai. Further, 57 (~60) flights for the remaining 3
tier-1 cities. So, in a day there are about 150 flights flying from Bangalore to tier-1 cities. For
tier-2 cities, there are about 58 (~60) flights flying from Bangalore to tier-2 cities.
So, in a day there are about 210 domestic flights taking off from Bangalore airport.
Question 4. Ola cab services are starting in Vizag. Estimate the number of cabs required in
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first week
Assumptions:
We need to first look at demand side for potential customers for the cab service
There are multiple factors to be considered while solving this:
1) Age group
2) Income group
3) Gender- Female population (1/4) usage rate shall be half compared to male (1/2)-
Hence, a conversion factor of ¾ is used
There are 1.72 lakh potential customers for cabs. Considering, the public transportation and
auto rickshaws, it can be assumed that about 50% of the middle class and 30% upper class
(who owns more cars) can be converted to use cabs.
Suppose 5% of them can be converted to customers of Ola in first week. This gives scope for
almost 10K Ola customers in first week. Considering the size of Vizag, it can be assumed that
each customer takes average half an hour of travel on cab per day. Adding a 50% factor for
waiting time, and assuming on an average each cab driver works 9 hours a day.
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