Decision Making Questions for XAT Set-3 PDF
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Instructions
Analyze the following caselet and answer the questions that follow:
Indian Institute of Research is a Government-established body to promote research. In addition to helping in policymaking, it also provides free online access to all the articles to the public. It has a mission of publishing high-quality research articles. Till 2010, the publication of articles was very slow because there was no incentive for researchers to publish. Researchers stuck to the mandatory one article a year. Most of the researchers engaged in offering consultancy and earned extra income. Since its inception, the institute was considered the best place for cutting edge research. The new director of the institute was not happy with the work done by researchers in silo and came out with a new research policy in 2013 to increase research output and improve collaboration among researchers. It was decided that extra benefits would be offered to researchers with new publications. As a result, the number of research articles increased fourfold in 2014. At the 2015 annual audit, an objection was raised against increased expenses towards remuneration for researchers. Further, the Government opined that the publication was itself a reward and hence researchers need be paid nothing extra. The director tried to defend his policy but the response from the government was not encouraging.
l. Note: Auditors role is to verify accounts.
Question 1: The director wanted to promote good decision making at Indian Institute of Research. A few trusted colleagues offered the following suggestions:
1. Auditors need not be allowed to object to extra benefits schemes.
2. Auditors need not pin-point sudden increase in expenditure.
3. Auditors need not be consulted before taking any policy level decision.
Which of the following combination of options should the director agree THE MOST with?
a) 1 and 2
b) 2 only
c) 2 and 3
d) 1 and 3
e) 1, 2 and 3
Instructions
Analyse the following caselet and answer the question that follow:
Chatterjee, the MLA of Trikathapur, owes his election success to his close friend and businessman Ghosh. The victory had appeared unlikely for Chatterjee after the arrival of Bhowmick, a budding politician with hordes of money. However, his clean image along with Ghosh’s money ensured Chatterjee’s resounding victory.
Question 2: After the elections, Ghosh requested Chatterjee to sanction the land adjoining his factory, for expansion. However, the requested government land was a green belt reducing harmful pollution from the factory.
Which of the following is the BEST option for Chatterjee in these circumstances?
a) Chatterjee should approve the sale only after Ghosh plants a large number of trees around the factory and the city.
b) Chatterjee should oblige Ghosh provided he recruits 20 locals as his employees on condition that they plant and maintain a tree each in their locality.
c) As Ghosh is paying market rates Chatterjee should approve the sale with no rides.
d) Chatterjee should approve the sale and ensure that the green belt is shifted to a different tract of land outside the city, purchased from the proceeds of the sale.
e) Chatterjee should unconditionally approve the transfer of the land to Ghosh as a token of gratitude.
Instructions
Answer questions on the basis of information given in the following case.
A few years back Mr. Arbit and Mr. Boring started an oil refinery business. Their annual earing is currently just 50,000 million rupees. They are now exploring various options to improve the business. Mr. Xanadu, a salesperson from Innovative Technology Solutions (ITS), is trying to sell a new oil refinery technology to Mr. Arbit and Mr. Boring. This technology could potentially enhance their annual earning to 150,000 million rupees within a year. But they have to make one – time investment of 100,000 million rupees to implement the technology. If the technology is not successful, the investment would be lost. Mr. Arbit and Mr. Boring are discussing about possible risks of the investment.
Question 3: Mr. Arbit and Mr. Boring did not invest in the new technology, but the new technology is a big success. Repentant, they are now estimating the additional amount they would have earned ( i.e. forgone earnings) had they invested in the new technology. However, the two owners differed on expected lifespan of the new technology. Mr. Arbit expected lifespan to be 5 years, whereas, Mr. Boring expected it to be 2 years. After the technology gets out – dated, the earnings from the business would drop back to 50,000 million rupees. What would be the difference between two expected foregone earnings after 5 years of the technology investment, if yearly earnings are deposited in a bank @10%, compounded annually?
Note: Forgone Earnings = (Earnings from business with new technology) – (Earnings from business without new technology)
a) 231,200 million rupees
b) 331,000 million rupees
c) 400,510 million rupees
d) 431,000 million rupees
e) 464,100 million rupees
Instructions
Read the following case-let and choose the best alternative for the questions that follow.
Ajay was thinking deeply about a problem that his organization, a business consulting company, faced. Globalization had affected his company like many other companies. Despite the downturn, the current revenues remained healthy. However, Ajay knew it was inevitable that the company could not do business the same way. The complexity of managing the business had increased with time. Consultants were under pressure to deliver good and innovative solutions. The organization had consultants from different age groups having a good mix of domain and industry expertise. It was a flat organization with three levels. The biggest challenge for Ajay was to have consultants with latest knowledge who would also earn revenues. Getting additional business was a challenge as all the consultants were busy and it was very difficult to hire new consultants.
Question 4: After Ajay implemented some of the steps mentioned above, consultants wanted to renegotiate their contract with the organization. It seems that the organization had never mentioned that consultants have to work across industries and domains. Some of the old consultants were reluctant to change their ways,
while many of the younger consultants were willing to follow Ajay’s advice. Which of the following decision can be taken by Ajay to handle this situation?
a) Retrench old consultants and recruit young consultants.
b) Pressurize non-conformists by giving preferential treatment to the conformists.
c) Negotiate with the old consultants and communicate that the new rules would apply to the new consultants only.
d) Do nothing and wait for a right solution to emerge, as with time resistance would die down.
e) Discuss the issue in an open house and let solutions emerge democratically.
Instructions
Girirajan an unemployed youngster from Kumbakonam, Tamilnadu, visited Singapore where his school friend worked as software engineer. In Singapore, Girirajan realized that there were a lot of Tamils in “Little India” area. He soon assessed that there were very few restaurants serving authentic Tamil food and decided to set-up a restaurant “Giri’s” in “Little India” serving authentic Tamil food in traditional banana leaf. Customers loved the food. Very soon word spread about the good quality food served in the traditional way. Girirajan expanded operation recruiting 10 employees, all Tamils.
Six months later, Girirajan realized that a lot of Kannadiga and Telugu customers started visiting the restaurant along with their Tamil friends. One day, a Kannadiga customer looking for Devangere Benne Dosa suggested that it may not be a bad idea for Girirajan to serve Karnataka and Andhra cuisines along with Tamil.
With time, the popularity of the reastaurant kept soaring. As a result, a lot of Malays, Indonesians and Chinese started visiting the restaurant. His software engineer friend advised to cater to customers of all nationalities. Despite his desire to go grand, Girirajan realized he did not have enough money to get extra space anywhere in Singapore and banks were also reluctant to lend.
One day, while assessing the business, he realized that the restaurant had 90% occupancy rate during peak hours and 40% during the non-peak hours. Both figures were increasing with time.
Question 5: Girirajan started analyzing his quarterly customer data to assess growth opportunities. He discovered that 20% of his customers are Kannadigas and many of them were requesting for a few Karnataka dishes. He was not sure if it was a good idea to serve Karnataka food. He wanted to experiment before taking the final call. Which of the following options will be worth experimenting in the next fortnight?
a) Introduce a Karnataka food day every week to please the Kannadiga customers.
b) Recruit a few Kannadiga waiters to interact with Kannadiga customers.
c) Rename a few Tamil dishes as Karnataka dishes.
d) Serve Karnataka dishes as and when requested by customers without the menu displaying these dishes.
e) Add a few Karnataka dishes to the cuisine and display these in a separate menu.
Instructions
Read the following caselet and answer the questions that follow:
Thakur Raja, a young cabinet minister, glanced through the notes of his secretary regarding the recent controversies on ‘Racket’, the most popular game of the country. While International Racket Association (IRA) has agreed to implement Drug Testing Code (DTC), the Racket Club which controls the entire Racket related activities had some reservations regarding the initiative. A majority of the citizens eagerly awaited their country’s participation and performance at the international competitions during the Champions Trophy. Due to the popularity of the game, 70% of the total revenue associated with the game originates from the country. Hence, the Racket Club has earned high bargaining power with the IRA and can influence decisions not aligned with its interests. Three of the most popular and senior players of the Club, including the captain, are against the imposition of DTC citing security reasons. A decision against the interests of these players might result in law and order problems throughout the country. Other players support the decision of their senior colleagues and if the Racket Club refuses, players may support the rebel Counter Racket Club, a new national level initiative. The Counter Racket Club can challenge the monopoly of the Racket Club, if it succeeds in attracting some popular players.
Raja was a great soccer player and has major reservations against racket. According to him, racket has negative influence on the country’s youth and distracts them from productive work. He also considers drug testing as an essential feature of any sports and games across the world. As the new cabinet minister for Youth and Sports, he needs to take some important decisions on this contentious issue.
Question 6: Identify the best argument for Raja to decide in favor of the IRA.
a) Raja is interested in making Racket less popular in the country.
b) Three of the top international teams are keen on implementing DTC.
c) The next World cup is scheduled to be held in a country which has made DTC mandatory.
d) Raja and the President of the Racket Club are political opponents and could use the present issue to settle their mutual scores.
e) Raja can justify his decision citing his position as a cabinet minister.
Instructions
Read the following caselet and answer the questions that follow:
Due to increased competition, Electro Automobiles, the Indian subsidiary of Robert Automobile Company (RAC) reported lower sales and profits. RAC expects its new model Limo, developed especially for value conscious customers of India and China, would revive its fortunes. In order to prevent customers from buying competing products, RAC announced the launch of Limo six months ahead of schedule. Unrest in its Indian supplier resulted in delayed delivery of essential components to its main plant. Hence, Limo was launched on schedule only in China. Within a short span, Limo captured 30% of the Chinese market , which was 200% higher than expectation. Indian customers were becoming increasingly restless because they couldn’t get a Limo in India. Electro’s dealers were worried, customers might switch to other cars.
Question 7: Mr. Murugan from Chennai experienced the comfort of Limo during his visit to China. He was willing to deposit an approximate price of Limo to buy the first available unit from Mr. Ahmed, a dealer in Chennai. Electro Automobile is yet to announce the actual price, and the process for allocation of the vehicles.
Which of the following is the best option for Ahmed?
a) Collect 50% of the entire amount Mr. Murugan is willing to deposit as advance and the remaining at the time of launch.
b) Collect the entire amount Mr. Murugan is willing to deposit after clarifying that delivery and price is subject to the company policy.
c) Collect the amount and transfer it to the account of Electro Automobiles, instead of keeping it in his personal account.
d) Collect the amount from Mr. Murugan. Later when the delivery is delayed, blame it on RAC’s problems.
e) Not collect the amount, but suggest to Mr. Murugan to write to Electro Automobiles.
Instructions
Read the following caselet and answer questions that follow:
Sanchit group of Hospitals seeks to improve the success rate and patient satisfaction rate by 100% in the next year. However, the management can’t afford to send doctors for professional development outside the country nor afford purchasing more equipment. As an in-house measure, the managing board thought of having doctors with high patient satisfaction to mentor those with less. Most of the doctors found it an interference by the management, judgmental and an expression of distrust. There were, however, some isolated few who found it a novel way of learning from each other. The doctors felt the management should instead increase consultancy fees and spend more on recruiting more paramedics who could spend time with patients, rather than blame doctors and decided to call it quits. For the management, this would mean loss of patients.
Question 8: Consider the following actions:
1. Conduct a survey of all stakeholders and ascertain their needs and suggestions.
2. Build consensus among doctors and paramedics on a possible way forward.
3. Prepare an action plan that details the road map along with financial implications.
4. Design differential service packages based on the affordability of the patients.
5. Run a brainstorming session among the leading doctors of the area.
Which of the following sequence of actions is most appropriate for the hospital administration in achieving their goal?
a) 5 , 4 , 2
b) 1 , 5 , 3
c) 4 , 2 , 1
d) 4 , 5 , 2
e) 1 , 2 , 3
Instructions
Madhuri Apte, a busy professional, rents out her studio apartment located in South Mumbai. Since she stays three hours away from the studio apartment, she uses a networked digital lock to monitor the property remotely. Each customer gets a temporary and unique access code for the digital lock that enables them to enter the studio apartment for the duration of stay. The apartment’s entrance door can also be opened with physical keys and Madhuri Apte has two such keys in her possession.
Madhuri Apte has employed a cleaner who has a permanent access code to enter the apartment for cleaning every day. She is available only between 15:00 hrs and 17:00 hrs.
Madhuri Apte’s apartment caters largely to international customers. A customer typically stays for 3 days, paying an average rent of $125 per day.
Question 9: Madhuri’s apartment received good feedback from the guests, except with respect to the operation of the digital lock. She decided to leave a spare physical key in the house for her guests. Recently some of the guests had forgotten to leave the key behind during checkout. Making a spare key will cost $500 and will take about 10 days to arrive. She was confused if she should continue leaving the spare key and was looking for a way out.
Which of the following would be the best way out for her?
a) Keep Digital lock as the only option and communicate to customers.
b) Be present during checkout to ensure the key is returned.
c) Request the cleaner to be present during checkout.
d) Send polite reminders to guests before checkout date and on the day of checkout to leave the key behind.
e) Charge security deposit of $100 which will be forfeited if the keys are not left behind.
Instructions
Answer question based on the following information:
Mrs. Sharma has a house which she wants to convert to a hostel and rent it out to students of a nearby women’s college. The house is a two story building and each floor has eight rooms. When one looks from the outside, three rooms are found facing North, three found facing East, three found facing West and three found facing South. Expecting a certain number of students, Mrs. Sharma wanted to follow certain rules while giving the sixteen rooms on rent:
All sixteen rooms must be occupied.
No room can be occupied by more than three students.
Six rooms facing north is called north wing. Similarly six rooms facing east, west and south are called as east wing, west wing and south wing. Each corner room would be in more than one wing. Each of the wings must have exactly 11 students. The first floor must have twice as many students as the ground floor.
However Mrs. Sharma found that three fewer students have come to rent the rooms. Still. Mrs.Sharma could manage to allocate the rooms according to the rules.
Question 10: If all the student that Mrs. Sharma expected initially had come to rent the rooms, and if Mrs. Sharma had allocated the north west corner room in the ground floor to 1 student, then the number of students in the corresponding room on the first floor, and the number of students in the middle room in the first of the east wing would have been:
a) 1 and 2 respectively
b) 2 and 3 respectively
c) 3 and 1 respectively
d) Both should have 2 students.
e) Such an arrangement is not possible
XAT Decision making practice questions
Answers & Solutions:
1) Answer (D)
Auditor’s role is to verify accounts only. So, statement 1 and statement 3 are out of the scope of auditors’ role. Therefore, the director would agree with statement 1 and statement 3.
Hence, option D is the correct answer.
2) Answer (A)
Options C and E are extremes and hence, cannot be the answer.
Shifting the green belt outside the city will not help in mitigating pollution inside the city. Option D is incorrect.
Recruiting 20 people who plant a tree each will not be able to compensate for the effect that a loss of green belt would have. Option B is incorrect.
Option A will easily fill the gap left after loss of green belt.
Hence, option A is the correct answer.
3) Answer (B)
4) Answer (E)
5) Answer (E)
6) Answer (C)
7) Answer (B)
8) Answer (E)
9) Answer (D)
10) Answer (A)
We hope this Decision Making Questions Set-3 PDF for XAT with Solutions will be helpful to you.
