How many washing machines sell in one year?
Turn an installed stock into annual replacement and first-purchase demand.
The question
Northline Research is sizing an invented urban appliance market in India. Every number is a case assumption. The target is one-year new-unit category demand and gross retail value. It is not the installed base or one retailer’s sales.
| Value | |
|---|---|
| Installed units at start | 900000 |
| Mean replacement life (years) | 6 |
| First-time installations this year | 50000 |
| Retail price per unit (₹) | 20000 |
Assume an evenly distributed replacement age profile. Each installation uses one new unit; replacement and first-time purchases are disjoint.
Test replacement lives of 5 to 10 years, with all other inputs fixed. Ignore used machines, inventory changes and price differences. No retailer market share is given.
“Explain the estimate, the assumption range and the next check.”
Not saved by this site. Your browser may restore text when you navigate back.
A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Define the annual unit
What would you do here? Open the move you’d make.
Separate replacements from first-time demand.
The strong move. The target is a flow over one year.
Use 900,000 as annual sales.
Tempting, but it misses something. The 900,000 figure counts installed units at one point in time, not purchases in this year.
See how a strong candidate says it
“Annual new units equal installed units divided by replacement life, plus first-time installations. The division turns a stock into units per year.”
Why it works: The target is a flow over one year.
Step 2: Show the range
What would you do here? Open the move you’d make.
Vary replacement life and show both ends.
The strong move. Longer life reduces replacement demand while first-time demand stays fixed.
Scale both replacements and first-time installations when life changes.
Tempting, but it misses something. The sensitivity changes product life only; the 50,000 first-time installations are held fixed.
See how a strong candidate says it
“At six years, 900,000/6 + 50,000 = 200,000 units a year, worth ₹4 billion. Lives of 5 to 10 years give 140,000–230,000 units, worth ₹2.8–4.6 billion. This is a scenario range, not a confidence interval.”
Why it works: Longer life reduces replacement demand while first-time demand stays fixed.
Step 3: Revise the assumption
A repair survey supports a new estimate: replacement life is now 8 years. The installed stock, first-time installations and price stay unchanged.
What would you do here? Open the move you’d make.
Use the revised life in the equation.
The strong move. New evidence changes the replacement flow.
Keep the original 200,000 because it was a round number.
Tempting, but it misses something. The longer life lowers annual replacements by 37,500; rounding does not preserve the old base.
See how a strong candidate says it
“At eight years, replacements are 112,500. Add 50,000 first-time installations for 162,500 annual units, worth ₹3.25 billion. I would update the base estimate.”
Why it works: New evidence changes the replacement flow.
Step 4: Choose the next research
What would you do here? Open the move you’d make.
Check age profile and replacement evidence next.
The strong move. The estimate depends on a steady replacement approximation.
Use ₹3.25 billion as our retailer’s forecast.
Tempting, but it misses something. No retailer share, channel reach or realized selling price was supplied.
See how a strong candidate says it
“I would validate the installed age profile and replacement behaviour before using this as a forecast. I would not call category retail value our revenue without a separate share and channel model.”
Why it works: The estimate depends on a steady replacement approximation.
The answer, in short
- Decision
- Use 162,500 units as the revised base, within the stated scenario range.
- Because
- Replacement life changed while the other assumptions stayed fixed.
- What would change it
- An uneven stock age profile or different first-time demand would change the equation inputs.
Common traps
- Confusing stock with annual purchases.
- Turning category value into company revenue.
Check your answer
- I named units per year.
- I separated replacement and first purchase.
- I tested the life range.
- I revised the base and named the next evidence.
Last reviewed Nov 10, 2026