Instructions

Read the situation below and answer the 3 associated questions:
A Multinational Company (MNC) sources pristine natural spring water from Bori, a village in Satpura mountains. The unprocessed natural spring water is directly bottled by the MNC. The company brands it as “Natural Spring Water” and sells at 50% premium vis-a-vis other brands that sell processed water.

The local panchayat, under the Panchayati Raj Act, 1992 controls the spring water usage. Hence, the company signed a 30-year contract with the panchayat for exclusive access to the spring water for business purposes. This contract contributes 50% to the panchayat’s revenues besides providing 250 jobs in the panchayat. The spring also meets domestic and agricultural needs of the people of Bori and the surrounding villages.

Question 31

The MNC has spotted traces of chemicals in their fortnightly water quality analysis. The MNC realizes that this is due to the contaminated agricultural runoff, flowing into the spring from the nearby fields where farmers use pesticides and fertilizers.
This requires an immediate solution. Which of the following options will BEST resolve the situation for the MNC?

Video Solution

Solution

Option A would be unethical and thus can be rejected.

Option B will also be wrong as after removing the contaminants, the water won't be natural spring water. So marketing it as such will be cheating the customers.

The unique selling point of the brand was that they were selling natural spring water and were also charging a premium for it. If they rebrand it as purified water, then it would lose it's uniqueness.

Option D will lead to massive losses for the MNC and can be rejected.

Option E is the best choice for the company as it will help them stay in business while they solve the problem.

Hence, the answer is option E.

Question 32

The MNC is concerned about chemical contamination of the natural spring water due to the agricultural runoff with pesticides and fertilizers. The MNC is looking for a sustainable solution to this contamination.

Which of the following courses of action will BEST solve the issue?

Video Solution

Solution

Option A might lead to tensions between the Panchayat and the MNC as the spring is the primary water source for the villagers, and they might not be ready to switch to an alternate source.

Option B will lead to the brand losing its uniqueness, and they won't be able to charge the same price for the water, leading to a loss in revenue.

Option C will lead to a substantial financial undertaking as the MNC will have to sign new deals and set up a new bottling plant.

Option E will lead to tensions between the farmers and the MNC as they will lose their primary source of income.

Option D is the best choice as it is a win-win situation for both parties.

Hence, the answer is option D.

Instructions

Read the situation below and answer the 3 associated questions:
The Small Shop, selling computer peripherals, is the only one of its kind in the remote village of Turturunk. Because online purchases take two weeks or more to arrive, The Small Shop is a quick stop for buying items such as pen drives and USB cables. Besides selling computer peripherals, The Small Shop also undertakes repairs of out-of-warranty products.

Question 33

The Small Shop which earlier recorded an annual increase of approximately 12% in revenues has been stagnating at 4% for the last three years, during which e-commerce sidelined brick and mortar outlets. The shop is struggling to increase profitability. In general, The Small Shop has been offering a discount on MRP to compete with e-commerce prices.
Which of the following is the BEST reason for The Small Shop NOT to reduce the current discount offered to the customers?

Video Solution

Solution

Taking a business decision just because of some words on a sign is not prudent; hence, option A can be rejected.

Option B can be ignored as the outside villagers form a very insignificant portion of the total revenues.

Option C can be rejected as even though the delivery fee has been charged since last year, it has not improved The Small Shop's business.

Option D does not mention the kind of business that is being started by the mentioned person.

Option E is the best choice, as the villagers form the majority of the shop's business and if they prefer the shop from e-commerce, then it is a reason to keep the discount.

Hence, the answer is option E.

Question 34

The Small Shop wants to increase the variety of products sold, including expensive ones. However, it is averse to accumulating unsold products, specifically of the expensive kind.
Which of the following is the BEST option if The Small Shop wants to increase the variety of the products it sells?

Video Solution

Solution

We have to choose the option that will provide the best course for the Small Shop to increase the variety of products.

Option B discourages the increase in variety and thus, can be rejected.

Option C mentions a minimum order every month, which could lead to the problem of unsold products. Hence, it can be dismissed.

Option D does not solve the problem of unsold products and also adds the cost of new rental space.

Option E says to exclusively sell expensive products. It will not increase the variety. Also, the expensive products will only form 10% of the total revenue, which is insignificant for such a drastic change.

Option A is the best option, as it ensures the increase in variety as well as solves the problem of unsold products.

Hence, the answer is option A.

Question 35

An emerging brand offers a franchise to The Small Shop for repairing its products, on a condition that other brands are not to be repaired. Repairs currently account for 15% of its revenues.
Which of the following, if true, will BEST help The Small Shop to decide on the franchise?

Video Solution

Solution

The Small Shop will be convinced to take up the offer if it has long-term benefits for the shop.

Option A will lead to the shop losing two employees for 3months. This will cause a problem for the proper functioning of the shop for those months. Thus, it will not encourage the owner to take the deal.

Option B will not encourage the deal as it will be a great risk as the brand is very new.

Option D is not related to the decision.

Option E is convenient for the shop but does not show that the business will improve. It just talks about maintaining the status quo.

Option C is the best option as it shows that the revenues from repairing are going to increase every year. This will encourage the shop in taking the deal.

Hence, the answer is option C.

Instructions

Read the situation below and answer the 3 associated questions:
When Deepti opened the package, she was aghast. She received cotton pillow covers instead of satin pillow covers, she had ordered. Deepti ordered them for her father from a popular e-commerce website that hosted products of many sellers.
Confused, Deepti contacted the seller’s office using the details given on the package. The seller’s representative profusely regretted and promised to send the satin pillow covers at no extra cost. He added that Deepti need not return the cotton covers she received. Deepti happily accepted the deal.
A few days later, Deepti received another package from the seller. Unfortunately, this package also contained cotton pillow covers. Completely disillusioned with the seller’s professionalism, Deepti decided to put to use these cotton pillow covers also.

Question 36

A few days later, Deepti received an email from the e-commerce website, requesting her to share feedback about the seller. Deeply frustrated with the overall online purchasing experience, she deliberately ignored it.
Later that evening, over supper, her father opined that the balcony curtains needed to be changed. He suggested that they be bought from a local shop. “If something went wrong, we could at least yell at the seller,” he added.
Deepti stared at her laptop and began writing her feedback.
What would Deepti DEFINITELY achieve by giving feedback?

Video Solution

Solution

Deepti initially did not give any feedback. She thought of giving feedback after her father mentioned that at least you can yell at the seller if you bought from a local shop. With this, we can infer that Deepti thought of venting her frustration by giving feedback.

The answer is option B.

Question 37

In the feedback column, Deepti awarded 1-star out of the maximum 5 stars to the seller and described her negative experience.
Later that evening, the sales head called and pleaded with her to retract her feedback and upgrade them to 5-star, as they had already fired the employee concerned. He appealed that they were a young organization and that their sales were getting badly affected.
Given the circumstances, what should be the IDEAL response?

Video Solution

Solution

Deepti did not share something which didn't happen and Deepti is sharing what actually happened. Hence, options A, C, D and E are not the answers.

Answer is option B.

Question 38

After a few months, the sales head enquired, “In case you are using the cotton pillow covers and like them, kindly rate them on the e-commerce website. It will help us serve our customers better.”
Later that evening, her father remarked, “You know, I really love these pillow covers though I am not sure why you bought so many of them”.
Which of the following reasons gives Deepti the BEST rationale to ignore the sales head’s request?

Video Solution

Solution

The seller didn't rectify his mistake and asked for a review on a product not ordered. Giving a review on a product she didn't intend to buy is not necessary. Hence, option B is the best rationale to ignore the sales head's request.

The answer is option B.

Instructions

Read the situation below and answer the 3 associated questions:
Rakesh, who hailed from Dhanbad, worked in Jamshedpur with SPCIL, a government construction company. Although HR policies concerning job security & work-life balance attracted Rakesh to SPCIL, over time he found his work monotonous with no growth opportunities. However, the proximity to Dhanbad enabled him to visit his parents at his convenience.

Recently Rakesh applied to Grow and Prosper (G&P), a multinational company engaged in construction related operations, making inroads into many Indian states. G&P interviewed Rakesh and offered him three times his current salary at SPCIL.

Question 39

While considering G&P’s offer, Rakesh pondered over the following facts:
1. A recent government policy made poor performance punishable by salary reduction or dismissal.
2. The first assignment at G&P is a bridge construction project in a village near Dhanbad.
3. With his current savings, Rakesh need not depend on regular income for at least six months.
4. Though an exemplary performer, Rakesh has hardly been recognized at SPCIL.
5. Based on the annual performance review at G&P, Rakesh will either earn double the salary or get fired.

Which of the following combinations of the above facts will BEST help Rakesh decide on joining G&P?

Video Solution

Solution

Among the five statements, we need to find statements that would motivate Rakesh to join G&P.
Statement 1 brings out the negative aspect of both SPCIL and G&P. Statement 3 doesn't help Rakesh in deciding to join G&P or not. Both statements 1 and 3 do not favour G&P. Statement 2 is in favour of G&P as the first assignment is in the village near Dhanbad. Statement 4 and 5 infers that Rakesh being a good performer, will succeed in G&P. Therefore, statements 2, 4 and 5 are in favour of G&P.

The answer is option A.

Question 40

While mulling over the offer, Rakesh consulted Manikandan, his trusted senior at SPCIL. Manikandan, who had friends in G&P, disclosed that it preferred government employees for its projects in Jharkhand, Bihar and Chhattisgarh. “Once the project is completed, G&P may not need your skills,” observed Manikandan.

Which of the following, if true, will BEST enable Rakesh to decide on the offer?

Video Solution

Solution

Options A, D, and E neither support nor weakens the point mentioned by Manikandan that once the project is completed, G&P may not need your skills. In option B, it is mentioned that Manikandan's contact has left G&P, but there can be many reasons for leaving the company. Option C infers that there are employees still working with G&P who worked on similar projects earlier.

The answer is option C.

CAT Content

XAT 2020 Question Paper

The MNC is concerned about chemical contamination of the natural spring water due to the agricultural runoff with pesticides and fertilizers. The MNC is looking for a sustainable solution to this contamination.

Which of the following courses of action will BEST solve the issue?

The Small Shop wants to increase the variety of products sold, including expensive ones. However, it is averse to accumulating unsold products, specifically of the expensive kind.
Which of the following is the BEST option if The Small Shop wants to increase the variety of the products it sells?

An emerging brand offers a franchise to The Small Shop for repairing its products, on a condition that other brands are not to be repaired. Repairs currently account for 15% of its revenues.
Which of the following, if true, will BEST help The Small Shop to decide on the franchise?

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