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XAT 2014 — Decision Making Question 12

Decision MakingEasy
Passage / Data

Read the following case – let and answer the questions that follow.

Intercontinental Business Manufacturing (IBM) was doing a roaring business. Demand of the products was high and supply of raw – material was abundant. IBM was manufacturing three different products Some customers bought two types of products and some bought only one. The three products were “quickie – quick”, “run – of – the – mill”, and “maxi – max”. Customers were not complaining loudly.
Ram, the product manager, was confused! Demand for “quickie – quick “was increasing .Raw material suppliers wanted to supply lower quality at cheaper price. It was profitable for the company to increase production .Quality department was not happy with the product. Ram met Rahim, the CEO, who, as always, wanted higher profits. He said that IBM will set up a committee for improving the quality.

What must not be done by Ram?

Answer & solution

Correct answer: Only produce “quickie – quick” as it gives highest profits.

  • Only produce “quickie – quick” as it gives highest profits.

  • B

    Increase the production for “quickie – quick” and ask the supplier for better quality raw material.

  • C

    Maintain the level of production for “quickie – quick” and ask the supplier for better quality raw material.

  • D

    Reduce the production of “quickie – quick” till committee submits its report.

  • E

    Stop production of “quickie – quick” till committee submits its report.

Solution

In order to arrive at the correct answer for this question, one must read it very carefully.
The passage mentions that, “some customers bought two types of products and some bought only one”. This implies that “run-of-the-mill” and “maxi-max” were in demand as well. Thus, Ram must not only produce the “quickie-quick”.
All of the other options, indicate courses of action that Ram must undertake.
Hence, the correct answer is option 1.

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XAT 2014 Decision Making Q12: What must not be done by Ram? — Solution | TheCATExam