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XAT 2020 — Decision Making Question 7

Simple EquationsEasy
Passage / Data

Read the following paragraph carefully and answer the question that follows:

Two industrial towns, Jayanagar and Ramnagar, about 15 kms. apart, are similar in land area, population, ethnic diversity and per capita incomes.
Jagdeep Singh owns a bakery named Le Baguette in Jayanagar. He specializes in croissants, masala bread and whole wheat bread; eggless cakes are also a favorite.
Among the four bakeries in Jayanagar, Jagdeep’s bakery with a market share of 30% is second only to the oldest Le Croissant bakery whose market share is 40%. Le Croissant commands a loyal customer base and does not offer eggless varieties.

From a newspaper, Jagdeep has learnt that Americans use their own ovens to bake ready-to-bake products, sold by some bakeries. This idea is apparently catching up in Indian metros as well. Jagdeep wants to try this out in his bakery. He has gathered the following facts:

  1. US bakeries that also sell ready-to-bake products earned higher revenues compared to those that do not.
  2. Around 7% of Jagdeep’s regular customers own baking ovens in their homes.
  3. The sale of baking ovens in India is forecast to increase by 12% every year, for the next three years.
  4. 50% of Jagdeep’s regular customers are fulltime working couples.
  5. In Indian metros, ready-to-bake products give higher profit margins compared to finished products.

Select the BEST of the following sequences of the above facts, in DESCENDING order of effectiveness, to support Jagdeep.

Answer & solution

  • A

    2, 5, 1, 3, 4

  • B

    3, 4, 5, 1, 2

  • C

    1, 5, 3, 2, 4

  • D

    3, 2, 1, 4, 5

  • 2, 3, 5, 1, 4

Solution

One needs an oven to use the ready-to-bake products. Thus step 2 is the most relevant from the other options. The next is step 3 as increasing demand of oven implies that the demand for ready-to-bake products will also increase. Having higher profit margins is the next step for consideration for Jagdeep. So between steps 5 and 1, the former needs to be considered first as it talks about India while the latter is about another country. Step 4 is the last step as it is not necessary that only fulltime working couples buy ready-to-bake products. So the correct descending order of effectiveness is – 2, 3, 5, 1, 4.
Hence, option (e).

XAT 2020 Decision Making Q7: From a newspaper, Jagdeep has learnt that Americans use their own ovens to bake ready-to-bake products, sold b — Solution | TheCATExam