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Decision Making Questions for XAT PDF

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Instructions
For the following questions answer them individually

Question 1

Mr. Shivakumar is Social science teacher and a self taught engineer who works in Sri. Vidya Government school in Mankulur district of Karnataka. Even
though he has no prior experience in building, he proposed the construction of two huge dams that would help to overcome the irrigation problems of the
district. The people of the district was enthusiastic about the plan and took Shivakumar’s plan to the district collector.
What is the best course of action by that should be taken by the collector?

A    Praise Mr. Shivakumar for the service he has done for the society

B    Experiment the plan in a small scale to check its feasibility

C    Accept the proposal given by Mr.Shivakumar as his plan seems to be plausible

D    Make necessary arrangements to ensure that the plan is successfully implemented

E    Reject the proposal of Mr. Shivakumar as he is inexperienced in the field

Answer: B

Explanation:
Even though Mr. Shivakumar is not very experienced in Engineering, the collector should have an open mind about the plan. He should first let experts study
the plan carefully and then decide whether the plan is feasible or not. From the options only option B suggests something in this nature. Thus, B is the best
decision of the author given the circumstances

Instructions

Read the information given below and answer the questions which follow.
Malibaba is a Japanese e-commerce company. In the annual meeting of the board of directors, it is decided that company will expand its business overseas.
They want to invest in at least 1 Asian country. The company forms a committee to analyze the market situation in various Asian countries. The committee
studies the market conditions in developing Asian countries and boiled down its search to 3 different countries. The pros and cons for each of the
countries are listed in a report which the committee submits to the board of directors. India is one of the prospective countries where Malibaba plans to

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invest. However, the country has restrictions on FDI in retail market. Moreover, there are already existing players like klipkart and napdeal in the Indian market.
Another prospective country is Sri Lanka where there is no existing competitor but the market reach is low. In comparison to India’s 1.2 billion, the population
of Sri Lanka is merely 20 million. The third prospective country is Pakistan. This country has a reasonably good market and there’s no competition . However,
the country is not well developed and thus the purchasing power of the people is low. Moreover, because of being called a terrorist hub, there are also security
concerns in Pakistan.

Question 2

Sri Lankan government is providing incentives for the foreign companies investing in the country. Malibaba wants to invest in only one country. Most of the
board members are in favour of investing in India while some of them want to invest in Sri Lanka. Which of the following reasons will convince the other
members to invest in India?

A    The market in India is far bigger than the market in Sri Lanka

B    The cost of setting up the business per potential customer in India would be way lower than that in Sri Lanka despite the government’s incentives

C    The benefits that Sri Lanka is offering are only for the short term. After some time the taxes in Sri Lanka would be same as those in India

D    Only a and b

E    All of these

Answer: B

Explanation:
Because of the larger market potential the cost of setting up the business per potential customer in India would be much lower than that in Sri Lanka. Hence,
despite governments incentives in Sri Lanka, the company will still prefer to invest in India.

Question 3

The company has finally decided to invest in India. However, the FDI restriction laws prevent the company from entering the Indian market in its current
form. Which of the following would be the best option for the company in such a scenario?

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A    Give up on the plan to invest in India and invest in Pakistan and Sri Lanka instead.

B    Register a company with a new name and start operations.

C    Tie up with an already existing e-commerce company in the Indian market.

D    Request the Indian government to relax the FDI norms.

E    Asks one of its board members, who has good political connections, to put pressure on the Indian government to allow FDI.

Answer: C

Explanation:
The easiest way to enter the Indian market would be to tie up with an already existing company. It would provide the infrastructure which is already there and
also help overcome the investment restrictions which have been put in by the government.

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Instructions

Read the following information carefully and answer the questions which follow.
Kamal owns a fruit and juice shop. His shop is one of the most popular shops in the area as he only sells good and fresh fruits. He has grown very old so he
decided to hand over the business to his sons Ajay and Vijay. However none of the two sons have any experience of the business.

Question 4

Ajay observed that his father used to sell fruits at 10% discount to some of his customers. He asked his father about it and he was told that these are loyal
customers who have been shopping from him for more than 5 years.
Ajay, however, wants to discontinue this service. Which of the following reasons given by Ajay is likely to convince his father to discontinue additional
discount service?

A    These customers often end up buying the fruits for other people and hence are misusing the service.

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B     The same customers frequently go to other shops and pay the market prices for the fruits.

C    None of them recognizes Kamal or appreciates his gesture.

D    Both a and c

E    Both a and b

Answer: E

Explanation:
The basic premise for giving discounts is that these customers are loyal. If these customers are purchasing regularly from the other shops and also buy
things for other people then they are not being loyal to Kamal's shop. Hence both argument a and b are likely to convince Kamal to stop giving discounts.

Instructions

Since two years, Balu is working in a software company, Axis Software Pvt. Ltd., as a Software Engineer. Due to the recent death of his father, he is the sole
earning member of his family. He is awaiting his promotion to a Senior Software Engineer as the improved pay would make the financial position of his family
better. Balu reports to his manager Amit, who is off late under pressure as his performance review is due and his team has been unable to meet the targets
set for this year.

During his time at Axis Software, Balu in his free time has developed a software which would efficiently streamline the leave processes of all the employees in
the company. One day Balu has shared the details of this software, in person, to his manager Amit hoping it would make his way clear for a promotion. Amit,
after testing the software has found it to be very good and now is thinking of presenting it as his own, in his performance review so as to make it benefit him.
He thinks he can easily convince Balu with this plan by giving him a promotion and also a salary raise of 30%.

Question 5

Which of the following actions is the most helpful for Amit?

A    Present the software as his own

B    Present the software as the work of his team

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C    Present the software along with Balu so that it makes both appear good

D    Give Balu the opportunity to present his software

E    Do not present the software to his manager

Answer: C

Explanation:
If Amit presents the software as his own it may lead him into trouble later on when the truth comes out. So Option A can be eliminated.
Options D and E do not benefit Amit in any way. So they can be ruled out.
If Amit presents Balu’s work as the work of the entire team it would make Balu as the entire team will get the credit. So the best option for Amit is to present
the software along with Balu so that it makes both of them look good.

Question 6

Amit has now informed Balu that he will present Balu’s software as his own and in return will grant Balu a raise and promotion. What should Balu do now?

A    Let Amit present his software as his own

B    Talk to Amit’s boss Mandar, about the plans of Amit

C    Leave the company

D    Tell Amit that he is not willing to accept the proposal

E    Talk to his colleagues and take the decision

Answer: D

Explanation:
Option A is unethical and must be ruled out.
Option B is not desirable as in this case Balu would be violating the organizational hierarchy.

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Leaving the company at this stage is not advisable as it would create a financial burden on Balu. So Option C can also be ruled out.
Informing his colleagues about Amit’s proposal is also not advisable as it may lead to misunderstanding with his boss.
Thus the best thing for Balu to do is to tell Amit directly that he is not willing to share the credit.

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Question 7

Which of the following is the main reason for Amit’s proposal to Balu?

A    Amit’s greedy nature

B    Amit not able to meet his targets

C    Amit’s financial situation

D    Balu’s financial situation

E    Balu making the software which was not a part of his work

Answer: B

Explanation:
It is given in the passage that Amit’s performance review is due and his team has not met the expectations set for this year. This is the main reason why Amit
wanted to present Balu’s work as his own. Thus the answer is Option B.

Question 8

What should the company do to avoid situations like this?

A    Do not allow employees to work over time

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B     Track the day to day activities of all employees

C    Do not put unrealistic expectations on a team’s performance

D    Make the roles of each employee clearly defined

E    None of the above

Answer: E

Explanation:
In the given options, none of these measures will prove enough to avert/avoid situations like this. So the answer is Option E.

Instructions

Read the following information carefully and answer the questions that follow.

Ayush Gangwar, a project manager at an FMCG company, was wondering how he should approach the issue of ‘Kide’ commercials. Kide had been doing well
in the market, but not a week went by without a customer writing to complain about the commercial.
It featured a woman saying, “Muddy shirt! Muddy shirt!” in a condescending voice to a man whose shirt was soiled with dirt. The man looked at his wife, who
was very embarrassed at the entire situation. Later the commercial shows her washing the shirt after rubbing Kide into it, and the other woman saying, “So
bright and tidy!”
The complaining letters, almost exclusively from women, expressed objections to the commercial because it was misogynistic and otherwise offensive as
well. Many of these unsatisfied customers said that they would not buy the brand because of the offensive commercial and because it was demeaning to
women. On the one hand, the brand was doing well; it was the brand leader in a growing market, though a much larger competing company was quite capable
of beating Kide.
Ayush was a believer in the profit motive, but not at the cost of condoning unethical behaviour. He had been asked to make a recommendation for the
commercial. After reviewing the sales data and reading the letters of complaint, Ayush was contemplating his next move. He analysed data which showed
that the primary decision makers and purchasers of the product were women. Part of the reason for Kide’s success was believed to be the advertising
message, which not only had a high level of recall but a high level of association with the brand. Ayush wondered if, in spite of its apparent success, it was
ethical to continue with the advertising message if it was misogynistic.

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Question 9

How should Ayush approach the situation?

A    Take no action until the issue is studied further.

B    Stop the existing message and come up with a new marketing campaign.

C    Modify the current message slightly.

D    Stick with the existing message as it is one of the reasons behind Kide’s success.

E    Use the previous marketing message which wasn’t so successful but never had criticism for being misogynistic.

Answer: A

Explanation:
It is mentioned that a larger competing company was quite capable of beating Kide. It is also known that the current message is one of the reasons behind
Kide’s success. Thus, changing or modifying the message entails the risk of losing the market to their rival. Thus, B and E are incorrect. C is also incorrect as
there is no guarantee that the modified message is as successful as the current one.
The correct approach should be to analyse the situation better. It is given that they are receiving at least one complaint per week i.e. at least 52 in the year.
But if the customers who are content with the commercial are much larger than this base, then changing the message is not the best idea as the message
has been proven successful. Thus, between A and E, A is the better choice as it addresses the complaints unlike E.

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Question 10

Ayush reported to Neha Singh, the marketing head, and would provide recommendations to her. Neha was a capable, promising executive who did not like
the Kide commercial. She proclaimed that she would never buy the brand because the message was offensive and asked Ayush to change the message.
But Ayush was not strongly in favour of the idea. He was worried about how the new message might affect Kide’s standing in the market.
What is the best course of action for Ayush?

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A    Work on the new message as it is suggested by his senior.

B    Approach the CEO of the company and express his concerns to him.

C    Start working on the new message but approach Neha once again expressing his concerns and reservations.

D    Send an anonymous mail to all the senior officials expressing his concern.

E    Modify the current message slightly so that it is less offensive.

Answer: C

Explanation:
A is incorrect as it might be the case that Neha’s strategy might not be the best. Ayush should not supress his reservations as it might seriously affect the
firm’s standing in the market.
B is also incorrect as it involves completely ignoring his senior’s order.
D is also incorrect as it doesn’t guarantee that the seniors will pay heed to an anonymous’ suggestions.
E is also not the best option as it still doesn’t addresses the situation completely.
C is the correct option as it ensures that his concerns are properly addressed and at the same time he is not offending his senior.

Instructions
For the following questions answer them individually

Question 11

Rohit, a senior auditor at E&Z;, is working with a team which is auditing Specific Motors, which is one of the major clients of the firm. During the audit, Rohit
finds a cut-off error which causes Specific Motors’ revenues to be significantly misstated. Rohit is aware that the E&Z;’s policy clearly states that an auditor
must report any potential adjustment in the work papers. The final determination of materiality is then made by the partner in charge of the audit.
Rohit also knows that Specific Motors is reluctant to make the adjustment. Vikal, the audit manager, tells Rohit “We will not mention this adjustment in the
work papers. Since Specific Motors is closely held and there are no tax implications. The partner has decided not to force an adjustment. Specific Motors
is our largest client.” Rohit is concerned. Failure to document such a material amount just does not seem right to him.

How should he approach this ethical dilemma?

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A    Discuss the relevant facts and express his concerns directly to the partner in charge of the audit.

B    Approach the management of Specific Motors stating that he can’t execute their request.

C    Not document the error as suggested by Vikal.

D    Document the error but state that it doesn’t involve any tax implications.

E    Document the error in compliance with the firm’s policies.

Answer: A

Explanation:
Options B, D, and E involves the risk of losing the biggest client of the firm. Thus, it might not be the best approach.
C is also incorrect as it doesn’t go hand in hand with his employer’s policies and is ethically wrong.
Thus, A seems to be the best option among the five.

Instructions

Sri Ramaiya College is a private engineering college with a national reputation for quality and innovation in curriculum and learning design. Recent rumors
hint at serious emerging financial problems, in sharp contrast with the institution’s century of stable financial history. Srinivasa Reddy , Ramaiya’s controller,
has scheduled a news conference for noon today. His objective is to get the financial problem rumors stopped by providing the news media with the
necessary data and information. Mr. Srninivas’s aide, Prajith Kumar, discovers an interesting situation while preparing for the news conference: there are
significant differences between the board-approved budget and the budget currently being used. In fact, the current budget includes approximately Rs 10
lakhs in additional expenditures that do not appear in the budget formally approved by the governing board. “I don’t want anyone else to get hold of this
information, Prajith,” directs Mr. Srinivas. “Get a copy of our actual operating budget, and substitute it for the one attached to the board minutes giving
approval. No one will know. The board members can’t remember details of the budget they approved. The public’s perception is more important than those
details, and I’ve got to deal with a perception problem at that news conference today.” Prajith hesitatingly starts to speak but is cut short by Mr. Taylor’s
directive: “OK, let’s get to it!”

Question 12

In this given situation what is the best course of action by Prajith?

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A    First report the changed budget to the public and then report the matter to the board

B    Change the budget according to Mr. Srinivasa Reddy directives to institution's good image

C    Do nothing and say nothing

D    Try to convince Mr. Srinivasa Reddy about the consequences if caught

E    Alert the Board to the problem

Answer: E

Explanation:
Providing false information will have legal consequences on the persons involved. So option B which talks about following Mr. Reddy’s directive is not right.
When there are possible better alternatives not doing anything is not the best course of action. Thus, C is also incorrect.
From the case let given it is clear that Mr. Srinivas is not willing to listen to any view of Prajith regarding the matter. Thus, option D is also not the best course
of action
Among options A and E, E is more correct as the before reporting such an important matter which could have grave consequences on the reputation of the
college it should be first discussed with the people in charge.

XAT Decision Making Mock Tests


Instructions

Abhishek , a lead supervisor in the manufacturing department has just received word of a squabble between one of his junior supervisors, Ashok, a recent
hard working college graduate, and Rajeev, a veteran machine operator. Ashok’s group had been working on an order for a major customer. Ashok had set up
a work schedule and job assignments which Rajeev, through experience, knew would not get the order out on time. Rajeev suggested a different sequence
which Ashok dismissed without discussion. The group began the order using Ashok’s setup, but Rajeev switched everyone over the minute Ashok left the
area.
The order was finished, on time, without further incident. Ashok later discovered the “mutiny,” however, and had a loud confrontation with Rajeev in front of
the entire group. Abhishek has reviewed the two work schedules and, indeed, Ashok’s assignments would not have gotten the order out on time. Since the

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customer uses a Just-in-Time inventory system, such a slip-up would probably have cost Abhishek’s company any future business with the customer. On the
other hand, Abhishek knows that a failure to support Ashok will cause an immediate loss of credibility throughout the entire department.

Question 13

What should Abhshik do in the short term regarding the altercation between Ashok and Rajeev?

A    Quietly ask Rajeev to keep an eye on Ashok, and report back to Abhishek if he has any future concerns

B    Admonish both the employees and transfer one of them out of the department

C    Back Ashok and discipline Rajeev severely

D    Incorporate measures to develop a more transparent and healthy relation between supervisors and the workers they supervise

E    Attempt to talk to both of them privately and try to resolve the matter

Answer: E

Explanation:
Both Abhishek and Rajeev are important to the organization. Thus, just taking action against one of them is not the right decision. Thus, both option C can be
eliminated.
Options A and D are decisions which would help in the long run but would be ineffective in the short run
B is an extreme step and should only be taken if efforts to settle their quarrel are not successful. Thus, option E is the best course of action in the given
situation.

Question 14

Abhishek decided to admonish Ashok and make him apologize to Rajeev. Ashok was initially not satisfied with Abhishek’s decision but after some time he
let go of his emotions and decided to focus on the project at hand. Which of the following would be the reason that he decided to do so?

A    Ashok is currently going through a rough patch in his relationship and does not want to complicate things further

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B     Ashok is more concerned about the organizations objectives than his personal sentiments

C    Ashok has a job offer from another manufacturing firm

D    Ashok knows that Abhishek has been acquaintances with Rajeev for long and took the decision not jeopardize the relationship with Rajeev

E    Abhishek is soon to be transferred to another department

Answer: B

Explanation:
From the question we can infer that Ashok even though was dissatisfied by the lead supervisors decision decided to focus on the job at hand. Thus, we can
say that he values the objectives of the company higher than his own ego. Thus, B could be the most probable reason for his actions.

Instructions

Pikea is an e-commerce marketplace for furniture, home and office products. They manufacture and sell different types of products and the main raw
material they use to manufacture many of these products is wood. Different suppliers supply the necessary raw materials. Pikea penetrated into market very
well, just in two years, its market share grew from 2% to 4%. Demand for wooden products was increasing and suppliers wanted to supply low quality wood at
cheaper price. It was profitable for the company to increase the production. The head of the quality department Gautham was not happy with this and
requested Rohan, the CEO to set up a meeting for quality improvement.

Question 15

Which of the following is the best decision to take?

A    Do what is profitable to the company and don’t care about the quality of the product.

B    Reduce the production of wooden products and try to increase the product quality of non-wooden products.

C    Stop producing non-wooden products as they don’t have an increasing demand.

D    Maintain the level of production and ask suppliers for better quality wood.

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E     Increase the level of production by producing low quality wooden products.
Answer: D

Explanation:
The only logical, ethical and profitable decision one should take in this situation is to maintain both the level of production and the quality of the product.
So the correct option is option D.

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Question 16

Though they decided to maintain the good quality of the product, after an increase in the production level of wooden products, the quality department has
been receiving numerous complaints about the quality of the product. Mr Rohan, who was busy solving some important problems concerning shipping
department felt uncomfortable with all these complaints regarding quality of the product.
If you were in Rohan’s position, what decision would you take?

A    Decrease the production level of wooden products.

B    Change all the suppliers, since they are supplying low quality wood.

C    Since quality of the product is more important, put shipping problems aside and think about how what’s wrong with the product quality.

D    Check with suppliers about the quality of wood and ask Gautham to come up with a plan to solve the problems regarding quality.

E    Fire Gautham, since he could not handle the work properly.

Answer: D

Explanation:
Options a, b, c are not proper solutions to solve the problem given in the question. And option E is harsh decision to make. Option D is the better decision to
make, so that they could work on the quality of the product with the help of Gautham’s plan without any further consequences.

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