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How Many Cups of Tea Were Consumed in Mumbai Last Month?
How Many Cups of Tea Were Consumed in Mumbai Last Month?
How Many Cups of Tea Were Consumed in Mumbai Last Month?
Assumptions
Every year India’s population would grow steadily, but the growth won’t be very fast-paced.
Every man and women would be eventually married (homogeneously or heterogeneously).
They won’t prematurely die or prefer not to marry. People would be married only once.
In rural areas the age of marriage (in average) is between 15 – 35 year range. Similarly, in
urban areas = 20 – 35 years. India is a young country, and 15 – 35 year range has around
50% of the total population.
Rural estimation
Rural population = 70% * 1.3 bill = 900 mill
Population within marriage age in a year = 50% * 900 mill = 450 mill
These people will marry within a 20 year time period according to our assumptions.
Urban estimation
Urban population = 30% * 1.3 bill = 400 mill
Population within marriage age in a year = 50% * 400 mill = 200 mill
These people will marry within a 15 year time period according to our assumptions.
Ans. A good proxy in such a problem is the population of India, i.e., 1.2 billion. Following is
an effective way to segment this population:
1. The rural population consumes far fewer cigarettes than urban because of the
purchasing power difference.
2. Male consume more cigarettes than females in both urban and rural populations.
3. Children below 16 years consume a negligible number of cigarettes.
4. Male to Female ratio in Urban is closer to 1 than that of Rural.
5. Male to Female ratio in younger generations is closer to 1 than that of older
generations. This is because of the increase in awareness level.
6. Bulk of the population start smoking after getting into a job and hence the average
number cigarettes are higher in older groups.
7. Total number of cigarettes from the supply side also comes to around 10 Trillion,
which gives a good sense check on the final number.
Ans. The best way to start with this question would be with the population.
Rural (BPL)
Urban
1. Urban Low class ~ 30% = 120 million = 22 million household : Usage 250gms
per month: 50 INR = 1100 Million INR
2. Surf Excel share: 5–7% = 77 million INR.
3. Daily: 77/30 million INR = 2.10 million INR
4. Urban Middle class: - 40% = 160 million = 40 million households (4 per family)
5. Average use: 500 gms per month , 90 Rs per month = 3600 million INR
6. Surf excel share: 20–25% = 900 million INR
7. Daily : 900/30 = 30 million INR
8. Urban High Class: 120 million ~ 30 million households (4 per family)
9. Average use: 1kg per month, 200 INR = 6000 million INR.
10. Surf Excel (King here) ~ 70% share ~ 4200 million INR
11. Daily = 4200/30 = 140 million INR.
12. Total Urban daily revenue: = 172 million INR
Guess estimates questions are one of the most common case estimation query
asked in IIMs interview for summer as well as final placement.With the right tools
and techniques, this case study becomes a cake walk.
1st : Lets assume we have 10000 professional tennis court all over India.
2nd: There must 3–4 tennis courts in any university. So lets suppose we have 10000 universities
in India.
3rd: We have district clubs, society clubs in every every districts. We have around 700(exact
739) districts in India and 10 courts in each district.
4th: We have rural areas too, so lets assume a total of 5000 courts.
Now on computing we have : 10000 + 4*10000 + 700 * 10 + 5000 =60000 courts in India
Now if we assume they lose 10 balls on an average, the 60000 * 10 = 600000 balls daily.
11. How would you estimate the number of fruits sold in India in a day?
I would prefer to answer this question as the number of fruits consumed in a day from
the view point of a consumer , not the seller. This estimation does not include Dry Fruits.
From this figure , we have to eliminate the population which is unable to afford eating
fruits. According to the figure stated in Wikipedia,
23.6 % people are below poverty line. I would approximate this figure to be 25% which
comes out to be approx 320 million.
So, now net population = 1285 million -320 million = 965 million
Let us categorize people into age groups and assuming a linear distribution of ages
across people (average life expectancy 80 years)
1. 1-15 = 181 million ~ 200 million
2. 15-50 = 423 million ~ 465 million
3. 50-80 = 362 million ~ 300 million
Since our population is has a fair majority of youth population, I have shifted the figures
appropriately.
Now, we have to assume the average consumption of fruits in these age groups.
Since this figure is totally based on individual consumption and does not focus on
commercial aspects , it would be fair to multiply this figure by 1.2!
Approach
The population of India is – 1,300,000,000 i.e. 1.3B
Internet penetration in India is – 30%
Assumed Population Distribution –
o 0-20 : 25%
o 21- 60 : 60%
o >60 : 15%
Similarly people of age between 21-60 and >60 using internet will
be 230,000,000 and 60,000,000 respectively.
Assumption
People of age 0-20 usually do not need an email account. But we may consider 5% of them do
have it.
13. What is the number of laptops sold in Bangalore on an average routine day?
Laptop is a costly product. I am assuming that people buy laptop only when they needed. That’s
why i am going to calculate potential market of laptops in India.
Total population of Bangalore = 18Mn ~ 20Mn
Let’s divide population on the basis of age
0–18 Yr – 30% of 20 Mn = 6 Mn -> We can neglect this age group because generally they don’t
need personal laptop and when needed, they prefer to use others laptop.
19–22 Yr – 10% of 20 Mn = 2Mn -> 0.6*2 Mn -> 1.2 Mn (This is the college age group. Most of the
college students need a laptop. Assumed 60% of them own a laptop)
22–50 Yr = 40% of 20 Mn = 8 Mn. 22-50 age group is the working class of the society. I have
divided this class into 3 major categories.
Corporate offices/Schools/Computer centers generally have desktop. Lets assume 60% are
desktops.
Laptops = 40% -> 0.9 Mn
Average life of a laptop = 5 year ( in India )
Number of sold per day in Bangalore = 0.9 Mn/ 365*5 ~ 500 laptops
14. How many doors are there in Bangalore? ( HINT: We consider only homes)
The population of Bangalore = 11 M around
Assuming the # of people with homes in Bangalore = 90% of 11M = 9.9 M
Assuming the average family size in Bangalore consists of 5 people.
Hence the # of homes in Bangalore = 1.9 M( =9.9/5)
Assuming average # of doors in a home = 3
Hence the total # of doors in Bangalore = 6M ( 1.9*3)