XAT 2012 — Decision Making Question 5
Answer the following question on the basis of the information given in the following case.
âââââââDue to increased competition, Ginger Automobiles, the Indian subsidiary of Pepper Automobile Company (PAC) reported lower sales and profits. PAC 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, PAC announced the launch of Limo six months before schedule. Due to unrest in its Indian supplier’s plant, deliveries of essential components for its main plant was hampered, and hence it decided to launch Limo in China only as per the original plan. Within a short span of time, Limo captured 30% market share in China, which was 200% higher than expected. Indian customers who had looked forward to purchasing Limo were becoming increasingly unhappy to the non-availability of Limo in India. Ginger’s dealers were worried about loss of business from the customers who might switch to other cars.
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, known for fair dealing. Ginger Automobile is yet to announce the actual price, and the process for allocation of the vehicles. In order to maximise his cash flow, Mr. Ahmed should
Answer & solution
- A
collect the amount from Mr. Murugan. Later when the delivery is delayed, blame it on PAC’s problems.
- B
collect 50% as advance and the remaining 50% after the confirmation of launch date by Ginger Automobiles.
collect the amount Mr. Murugan is willing to deposit after clarifying that delivery is subject to the company policy.
- D
not collect the amount, but suggest to Mr. Murugan to write to Ginger Automobiles.
- E
collect the amount and transfer it to the account of Ginger Automobiles, instead of keeping it in his personal account.
A is not fair. B misses a very important point about informing the customer about Ginger Automobile and its announcements. D does not maximize Mr. Ahmed’s position or cash flow in anyway. E has the same error as B. C is fair on both Mr. Ahmed and the customer get a fair deal.
Hence, the correct answer is option 3.