Business Judgement Book-XAT

Business Judgement Book
This book is designed to provide readers a comprehensive orientation to Business Judgement Fundamentals. It contains the important theory related to Business Judgement questions and lot of practice exercises relate to the same.
There are eight Business Judgement tests along with the important theory. The Theory part of the book will be discussed by the faculty in the class, while the test assignments have to be taken by the students as a home-work exercise.
A sincere student must solve this assignments atleast two to three times.
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Business Judgement
Survival in todays harsh economic times has become critical. A miss here or there causes untold havoc. Anything short of accuracy is inexcusable. In businesses, acumen and gumption are called for. While the latter is either inborn or can be acquired in a course of time, the former needs to be sharpened, honed and shaped so that one has the cutting edge over competitors and contemporaries. Decision making is a challenging, yet an unpleasant task . Invariably, the consequences of a decision made and implemented fall on the decision maker. He or she becomes the cynosure or the butt of criticism, uncharitable talk and the subject of meaningless discussion. But decision making cannot be avoided. It becomes an inseparable constituent of mans living. Be it in social, domestic, professional or business spheres, decision making is there for all times. The skill-set or tool required for decision making is judgement. Judgement requires a sharp insight, focussed application of mind and precision oriented mindset. Business judgement, is associated with the outcome of decision making that has an influence over the functioning, sustenance, reputation and strength of a business and hence is certainly a vital skill set to be developed and nurtured. Basically, Business Judgement is all about ones reading habits, the power of comprehending and assimilating the written stuff. The more one reads, the vaster would be the area of exposure. The ability to sift the chaff from the grain, to segregate the unimportant and the irrelevant from the important and the relevant, and that too speedily, is the key skill required. A businessman is required to decide on various matters, using the judgemental skills at disposal. Matters, of which no prior background existed and to which the businessman has scanty exposure, come under decision making. An overall knowledge, a general awareness, commonsense and a clarity in thinking is needed. All situations are not similar. Some may require a superficial handling, some may call for profundity or depth. There is no universal rule or formula or a law to be followed, unlike in science. Each situation has to be tackled on a case-to-case basis, using native intelligence, acquired learning and inherited wisdom. A working knowledge of the laws and precedents come handy in arriving at a decision, yet most of the decisions are situational and cannot be standardised as theory. The book is a set of case situations in business spheres. Cases cover diverse circumstances. Each is representative of a typical situation faced in real life. Each case is bounded by constraints and assumptions which have to be considered when arriving at a decision. The case itself might contain unwanted and irrelevant matter. The reader is required to retain the required stuff and discard the rest. Some of the questions are direct, some are inferential and entail reading between the lines.
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The mode of teaching in most of the management institutes is through cases. Theoretical knowledge is more than matched by pragmatism and commonsense. Knowledge and application of law is essential. A statute or a provision under an Act or a law is quoted, a situation is described and the learner is asked to arrive at a decision using those statutes and provisions. Hence the objective of this book is to equip the learner with (1) good reading comprehension. (2) an ability to recognise and categorise data as required by the problem in a minimum possible time. (3) an ability to recognise data and its importance. In other words, Business Judgement comprises Reading comprehension (RC), Data Application (DA) and Data Evaluation (DE) skills. Business Judgement, to sum it up, is all about the clear understanding of the goal, the theme of the decision, factors and the assumptions made by the decision maker.
Basics of Business Judgement

As has been repeatedly mentioned earlier, a good reading and comprehending power is very important for many aspects of the MBA entrance test, including the Business Judgement portion. The reading skills help you to understand maximum amount of data in the minimum possible time and also help you to properly categorise data as required by the problem. Following is a detailed explanation of the terminologies used in context of Business Judgement problems.
Data Application Problems

In a typical BJ problem you will be given a lengthy passage containing a standard Business situation with lots of facts and figures. The Data Application problems will be basically of the Reading Comprehension (RC) type which you have attempted in detail earlier. Each question is followed by (4) or (5) options, as the case may be & the student is required to choose the best option. Some typical question formats could be a. b. c. The author basically implies that ..... It can be inferred from the passage that ..... We may conclude that .....
The basic difference between BJ and RC would be that the case would be predominantly related to a business situation and in some instances may require application of common business sense to judge certain situations.
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Data Evaluation Problems

This is the most important form of problems posed under the BJ section. You will be given different conclusions / statements / assumptions / items and would be required to classify each of these under one of the following categories viz. 1. MAJOR OBJECTIVE: An objective is a final result desired by someone. Hence a major objective is the most important result desired. It is the aim or the major purpose of some action. MAJOR FACTOR: A factor is used to determine the decision. Thus a major factor is a basic factor influencing a decision. It might affect the basic reason for some action. MINOR FACTOR: It is a secondary/less important factor affecting the decision taking process. MAJOR ASSUMPTION: It is the basic/primary assumption made by the decision maker in order to make the decision. UNIMPORTANT ISSUE: It is not significantly related to the decision making process. tututtu
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Classroom Exercise
The Company : Wingfleet, Inc., is the fourth largest aircraft manufacturer in the world. Last year, the companys sales revenues were slightly under two billion dollars. Wingfleet, an old company in terms of aviation history started production in 1921, struggled through the depression, and entered World War II as a medium-sized company. Thousands of fighters and bombers rolled out of Wingfleets factories. It gained a world wide reputation for well designed and well-constructed military aircraft and continued to grow until the late 1960s. It now employs over 100,000 people in many plants throughout the U.S. The suppliers of Wingfleet employ another 75,000 workers. In short, Wingfleet is a solid supporter of the nations economy. Opportunity : The 2L-1000 John Franco, Chairman of the Board of Directors of Wingfleet, carefully studies a lengthy proposal by an executive committee, consisting of three board members and three vice presidents, recommending that the company should bid on a new military-transport plane, the 2L-1000. This will be the largest and one of the fastest transport planes in the world. It will take at least six years to design, test, and bring into full production the 115 planes to be built for the government. The project will provide jobs for 25,000 Wingfleet workers, plus 20,000 jobs for Wingfleet suppliers.
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Advantages : Nearly 90% of Wingfleets business is with the U.S. Government. Therefore, the aircraft manufacturers sales revenue is dependent on the federal budget. During times of national emergency (such as the cold war, the Vietnam and Korean conflicts), Wingfleet does very well. But lately Congress has cut defence expenditures, and these cuts have greatly reduced Wingfleets earnings. In 1966, for example, Wingfleet showed a profit of 51 million dollars. But last year, the company lost $ 33 millions. Thus it would be advantageous for Wingfleet to enter the commercial aircraft field to diversify its sources of revenue, and, paradoxically, this is one of the reasons why the executive committee recommends going all out to get the 2L-1000 contract. The huge transport, with slight alteration in design, will make an excellent commercial passenger plane, the committee claims. In this connection, a preliminary survey of major airlines showed that nine domestic and foreign airlines indicated their willingness to order 201 of these commercial planes. Furthermore, should Wingfleet get the government contract, these airlines would order the planes and make immediate and substantial down payments. Wingfleet has a tentative, but exclusive, contract with the Ponzal Company, one of Europes leading engine manufacturers to design and produce the planes engines. This contract depends, of course, on whether Wingfleet decides to bid on the military contract and gets it. The fact that Ponzal engines will power the 2L-1000 should make the Pentagon regard the Wingfleet bid favourably. Dangers : John Franco ponders the possible problems that might arise should Wingfleet take on this enormous project. In order to get the contract against vigorous competitors, Wingfleet must make the lowest bid, which is estimated at 1.7 billion dollars if everything goes perfectly. Therefore, the executive committee suggested a bid of 2 billion dollars. But John Franco is aware, after 33 years with the company, that it is rare when actual development costs do not exceed estimates. He realises that two or three major structural problems would quickly eat up the million-dollar gross profit. On the other hand, he figures, costs over bid might not be disastrous. It is possible to renegotiate a government contract when cost overrun occurs. Wingfleet has done this many times. In fact, cost overruns average 50% over accepted bids, and these have usually been made up by the government. However, John Franco wonders if Congress in its present anti-military spending mood would approve an appropriation to make up the difference. Franco is also uneasy about the Ponzal Company. He has no doubt about the quality of Ponzal engines, but the foreign firm is nationalised. Its profit have been almost nonexistent for the past few years, and governments, he has discovered, are far less patient with losses than capitalist shareholders. Suppose the European government that owns Ponzal decides to liquidate the engine company in the middle of the 2L-1000 contract? He shudders at the thought. Even though the airlines put down substantial payments for the 201 civilian planes, this money will not solve Wingfleets poor cash position. The company must depend on 25 banks to advance half a billion dollars for the 2L-1000 project, and this will add substantially to Wingfleets overall debt. Finally Wingfleet has tried to enter the commercial airplane field three times without success. The failures could not be blamed on inefficiency or lack of knowledge of the market, because careful surveys preceded each attempt. Yet each time Wingfleet guessed incorrectly. Could this happen again?
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Decision: Despite his many misgivings, John Franco decides to recommend to the full Board of Directors that Wingfleet make a 2 billion dollar bid for the 2L-1000 contract.
Data Application Questions

1. Most of Wingfleets income is derived from sales to (1) (3) (5) 2. Foreign governments. Domestic airlines. Private agencies. (2) (4) The U.S. governments. Manufacturing companies.
According to the passage, Wingfleets earnings are erratic due to (1) (2) (3) (4) (5) Poor management. Cost overruns. The vagaries of the federal budget. Attempts to enter the commercial aircraft field. High bank debt. of the advantages of the 2L-1000 contract for Wingfleet would be that the contract will lead to other government contracts. Congress doesnt particularly care what the cost will be. the contract will keep Wingfleet from going bankrupt. the military plane can also be sold to foreign governments. a change of design can change the military plane into a commercial one.
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One (1) (2) (3) (4) (5)
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A preliminary survey of major airlines shows that they (1) see no advantages in purchasing a commercial counterpart of 2L-1000. (2) will purchase 201 planes of the 2L-1000 type with substantial down payments. (3) will consider purchasing passenger planes after the 2L-1000 is produced. (4) have no funds to buy new planes. (5) are willing to lend money to Wingfleet to make the 2L-1000. Regarding the 2L-1000 contract, the Wingfleet executive committee suggests that it (1) make a bid for the 2L-1000 contract. (2) postpone a decision until there is further study of the project. (3) turn down the contract. (4) make a low bid to secure the contract. (5) try to sell more of the commercial counterpart of the 2L-1000. John Franco considers that problem with cost overruns is that (1) Congress has frowned on paying these costs in the past. (2) the loss would have to be sustained by Wingfleet. (3) in its present mood Congress might not approve these extra costs. (4) the government has little experience with overruns since they happen so infrequently. (5) they would indicate that Wingfleet is very inefficient.
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One reason that the Pentagon might favour Wingfleet is that (1) Wingfleet has an excellent reputation in manufacturing commercial planes. (2) the national economy might be thrown into chaos if Wingfleet does not get the contract. (3) so many banks are willing to back Wingfleet. (4) Wingfleet has already built a plane very similar to the 2L-1000. (5) Ponzal engines will be used. Which of the following is a major concern of John Francos regarding the 2L-1000 PROJECT? (1) Wingfleet does not have the technical ability to produce such a plane as the 2L-1000. (2) The Wingfleet bid might be too high. (3) Wingfleets suppliers in the U.S. might become bankrupt before the project is finished. (4) Ponzal might be liquidated. (5) A commercial counterpart of the 2L-1000 might be impractical. Which of the following best describes Wingfleets financial situation in its consideration of the 2L-2000 contract? (1) Wingfleet will have to depend on many banks to produce the 2L-1000. (2) Wingfleets cash position is excellent because of recent high profits. (3) Wingfleet will need to obtain foreign capital. (4) Wingfleet has little bank credit. (5) The down payments from the commercial airlines will provide enough cash to Wingfleet to see it through the 2L-1000 contract.
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10. Which of the following best describes Wingfleets past experiences in aircraft manufacturing? (1) Wingfleet has had little luck in entering the commercial aircraft industry. (2) Wingfleet was most successful in the commercial aircraft field, but gave this market up. (3) The company avoided military plane production. (4) The manufacturer has shown consistent losses on government aircraft contracts. (5) Wingfleet saw no reason to produce commercial aircraft.
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Data Evaluation
DIRECTIONS: Based on your analysis of the situation, classify each of the following conclusions in one of five categories. Check : (1) for the conclusion to be a major objective in making the decision i.e. the outcome or result is sought by the decision-maker. (2) for the conclusion to be a major factor in arriving at the decision i.e. a consideration, explicitly mentioned in the passage is basic in determining the decision. (3) if the conclusion is a minor factor in making the decision i.e. it is a secondary consideration that affects the criteria tangentially, relating to a Major Factor rather than to an Objective. (4) if the conclusion is a major assumption made in deliberating i.e. it is a supposition or projection made by the decision maker before weighing the variables. (5) if the conclusion is an unimportant issue in getting to the point i.e. it is a factor that is insignificant or not immediately relevant to the situation. 11. Entrance into the commercial aircraft market 12. Possible cost overruns of 2L-1000 13. A projected six year period to produce the 2L-1000 14. The ability of the 2L-1000 to be modified into a commercial plane 15. Ninety percent of Wingfleet business has been with the United States government 16. Down payment by airlines 17. The willingness of airlines to order 201 planes 18. Diversification of the market 19. Recent drop in Wingfleets profit 20. Wingfleets experience in manufacturing military planes
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DIRECTION for Q.21 25: These questions are based on the provisions of the Factories Act 1948. Section 21: Dangerous part of every machinery is to be surely fenced. (1) Examination of machine in motion by trained adult male worker. The name of the person so engaged shall be entered in the prescribed register. Further he shall be furnished with a certificate of appointment. (2) No woman or young person shall be allowed to clean, lubricate or adjust any part of machinery in motion. Section 62 (1- A): No adult worker shall be required or allowed in any factory unless his name or other particulars have been entered in the register of adult workers. Section 66: A woman shall be required or allowed to work in the factory only between 6 a.m. and 7 p.m. In each of the given questions, choose the best alternative. 21. P an apprentice fitter, was injured while cleaning a dangerous part of a machine which had been manufactured abroad. The machine was unfenced while adjustments were made to it. Is there violation of the Factories Act? (1) No violation of the Factories Act. (2) Yes according to Section 21. (3) Yes, according to Section 21 and Section 62(1). (4) Data insufficient to answer the question. 22. Wives of 3 workmen employed in a textile factory work in a place of their husbands for about half an hour every day after 7 p.m. while the latter take meals brought by them. Is there a violation of the Factories Act? (1) Yes, prime section violated being 62 (1-A). (2) Yes, prime section violated being 21 (2). (3) Yes, prime section violated being 66. (4) Both (1) and (3). 23. If based on information given in the previous question, women are also workers on the factory roll. Is there violation of the Factories Act? (1) Yes, prime section violated being 66 (1-A). (2) Yes, prime section violated being 21 (2). (3) Yes, prime section violated being 66. (4) None of the above. 24. Based on information given in Q.22 how many sections are violated maximally? (1) 1 (2) 2 (3) 3 (4) 4
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25. Based on information given in Q.22 if one of the women should be injured, then according to you, who would be penalised? (1) the factory manager. (2) the worker. (3) the workers wife. (4) all of the above DIRECTIONS for Q.26 30: For the following questions, choose the alternative which most logically follows the idea or information given in the statements given below. 26. The objective of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 is to provide for the institutions of provident funds, family pensions, and deposit linked insurance schemes, for employees in factories and other establishments. (1) (2) All tea plantations must be brought under this act with immediate effect. The schemes of provident funds, especially, are a social security measure and are meant to induce employees to save a part of their income for a rainy day. The amount which goes into the provident fund is a whopping 8 1/ 3 % of the employees wages. Provident fund is meant to provide for the dowry of a marriageable daughter.
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27. Premium is a term which has a wide usage in business circles. The most important usage is (1) (2) (3) (4) an individual getting a reward for meritorious service. a payment promised by a policy holder for indemnification of losses suffered in the course of business. the difference payable for purchase of new bonds or stocks over the original selling price. payment for extinguishing an obligation before it falls due.
28. The term bear in stock market jargon means (1) (2) (3) (4) One who is a rumour monger in the bourses. One who sells the shares in a flurry precipitating their prices. One who indulges in inside trading. A very respected person in the bourses.
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29. Multiple shop, a large-scale retail organisation, is generally owned and managed by a Joint Stock Company. The general frame work of multiple shop retail establishment will be like any company form of commercial organisation. The multiple shop system of retailing is thought of as (1) (2) (3) (4) a compromise between centralisation of company and decentralisation of selling. a method of increasing the turnover by providing facilities of credit and free delivery. a way to achieve standardisation in appearance, products, prices and control. a tool to provide sufficient employment opportunities at the supervisory level.
30. The storage of goods is made possible by the network of warehouses specially constructed for this purpose. Warehousing can be defined as the assumption of responsibility of the storage of goods. By means of warehousing (1) (2) (3) you can improve the quality of goods and preserve them for long, if they are not in good condition when going into storage. you can hold stock of goods for any length of time awaiting an increase in price for sale with maximum advantage. you will be able to avoid the delay in waiting for the arrival for the goods from the producers, complete other functions such as assembling, dividing etc. in time. the producers can realise the sale value immediately without waiting for the actual sale by the retailers.
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DIRECTIONS for Q.31 35: In the following questions, there is a short situation/ passage followed by a question. Choose the alternative which most logically follows the idea or information given in the situation/passage. 31. You have an incomprehensible maze of application systems, technology tools and platforms. There are many old legacy systems and many new system development projects underway. In spite of stated objectives to integrate efforts, each project tends to operate autonomously. You want to organize, simplify and streamline the systems. You want to reduce the variety of technologies used and invoke a manageable set of standards. But first you must find a more meaningful way to map out what you have now, clarify where the development projects are going, and which tools support which parts of the business. What can be the most valid reason for trying to integrate all the systems? (1) (2) (3) (4) Bringing innovation. To reduce system complexity and increase efficiency. Technological upgradation. Integration is not needed as it kills diversity.
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32. Market changes require that you participate in e-business. This demands fundamental changes in the way business is conducted. What specific changes will be required for your business, and what will be the total impact? How much will this cost? What will happen as the changes are implemented? You need a roadmap to pinpoint where and how the sequence of changes should take place. You need an architectural framework to show how a change to one part of the business will impact other parts of the business as the transition moves forward. What is the most important cause for participating in e-business? (1) (2) (3) (4) It is customers preference. Internet penetration makes it mandatory. It is simple. Changing markets make it imperative.
33. Out of the number of foreign workers by industry in 1998, the top was 71, 198 in the manufacturing industry, followed by 24,752 in the service industry. Out of the number of foreign workers, as per the types of jobs, 70,173 were production process workers and 21,983 were professionals, engineers and administrators. According to the Ministry of Justice, at the end of 1997, foreigners living in Japan who registered under the Alien Registration Law were about 1.5 million. 83.6% of those with engineering skills and 87% of those with technical skills were from Asian countries, and 66% of those with education skills were from North America. Person of which country has the highest probability of getting a job as technical co-ordinator in an auto firm in Japan? (1) France (2) U.S.A. (3) Singapore (4) U.K. 34. Manufactured products are made from atoms. The properties of those products depend on how those atoms are arranged. If we rearrange the atoms in coal we can make diamond. If we rearrange the atoms in sand (and add a few other trace elements) we can make computer chips. If we rearrange the atoms in dirt, water and air we can make potatoes. What according to the passage is most true? (1) Computer chips can be got from potatoes. (2) (3) (4) It is the arrangement of atoms that makes the difference. Molecular structure is independent of atomic number. It is the atomic number of atoms that decides the end products.
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35. In the future, nanotechnology will let us take off the boxing gloves. Well be able to snap together the fundamental building blocks of nature easily, inexpensively and in almost any arrangement that we desire. This will be essential if we are to continue the revolution in computer hardware beyond about the next decade, and will also let us fabricate an entire new generation of products that are cleaner, stronger, lighter, and more precise. In what context, take off the boxing gloves is used here? (1) (2) (3) (4) Nanotechonology will diminish the country barriers. Nanotechonology will help in work and creation at a more miniature scale. Nanotechonology will help in creating better life styles. Nanotechonology is a boon.
DIRECTIONS: Read the given cases carefully and answer the questions following them.
Case No. 1
Sigmund Johnson was an aeronautical mechanic having joined the Chicago plant of Flights Progress Inc., U.S. as an apprentice way back in 1954. His initial responsibilities were indeed trivial by nature, ranging from spare parts cataloging to maintaining the registers for daily attendance in his shop. His immediate boss was Rob Butler, who had been on the shop-floor for the last 6 years, having undergone promotion once. He (Rob) reported directly to the Section Manager Mr. Tom Moody who in turn presented the daily reports of the progress in the shop-floor to the General Manager Mr. Arthur McDouglas. Sigmund was extremely meticulous by nature and tended to be a perfectionist at times. His aim would always be to perform the task in the most clean, precise, and correct manner. This led him to suggesting the restructuring of spare parts stacking methods in the company warehouse. This, he claimed, would reduce the retrieval times by as much as 50% or more. At that time, the company warehouse operations were not computerised and hence procuring an item from the warehouse was extremely time-consuming. His idea was not appreciated by Butler who probably saw danger to his status and power. However, the enterprising Sigmund approached Mr Moody and discussed his plan with him. Mr Moody was very impressed by the plan and ordered its immediate implementation. This caused considerable friction between Sigmund and Butler and gradually their rapport worsened. The matter reached a flash point when Sigmund found out that the implementation of the plan was being unduly delayed by Butler to prove his authority. Sigmund decided to ask Mr Moody for a transfer to the Seattle plant of the same company. Considering his record and aptitude, Moody decided to shift him to the latest and most modern hydraulic shop of the Chicago unit itself. When Johnson joined the new shop, he could sense the spirit of urgency and coordination in the atmosphere. In fact the new shop was instrumental in implementing the latest design of the Research & Development Cell at the company headquarters at Boston. This design was a major shift from the earlier and the then prevalent technologies of landing gears of aircraft and could also be used for military purposes. This design, it was thought, would change the fortunes of the company by projecting
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it as a technology driven and innovating company, quite unlike the stereotyped version of a stagnant company. Johnson was once again a very happy man. He had an extremely professional work environment coupled with cooperating and intelligent colleagues and seniors. Once again, Johnson set himself in motion under the guidance of his new boss, Perry Simpson. But Johnson was in for a major surprise when within 2 months of his joining the new shop, he received a promotion order from Mr Tom Moody who terminated his apprenticeship and made him the Junior Technical Supervisor under Perry. It was the most exciting period of Sigmund Johnsons life. He took part in every activity in the shop floor with full interest and soon became the most popular figure there. Promotions came fast: Senior Technical Supervisor (1957); Junior Floor Manager (1959); Floor Manager (1962); Section Manager (1965); Senior Section Manager (1967); Divisional Manager (1970) and Director (1972). It was a meteoric rise for him keeping in mind especially his educational background which was not particularly distinguished. Now Johnson regularly attended the Board meetings and was a highly respected figure in the company circles, especially for his technical knowledge which he largely gained from the work experience. There were hardly any other senior executives who had put in so many years of service for the company. The present President of the company, Johnson believed, could retire any day now. He now expected only one final promotion: Presidentship of the company. He knew that a few more years of hard labour could well see him to the most coveted post. The year 1973 saw some major changes in the company policies. Recruitment to the company was now strictly on the basis of educational qualifications and relevant work experience. Freshman entry was restricted only to the most reputed technical colleges. The bombshell for Johnson came in the form of a company regulation specifying qualifications-based promotions. This, in effect, meant no further promotions for Johnson as he had already received the full benefit of his experience as far as promotions were concerned. Highly outraged, he stormed into the office of the company President, Mr Donald F. Trumpstone Jr. and demanded a modification to the regulation. The President made it clear to him that no such modifications were possible. The shocked President witnessed Johnson, who threatened to resign, walk out of his office. However, Johnson soon received a notice of an urgent board meeting (called by the President himself) to discuss the issue with all the other directors. DIRECTIONS for Q.1 5: With reference to Johnsons decision to oppose the new regulation, categorise the following question as (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a minor factor in making the decision. (4) a major assumption made while making the decision. (5) an unimportant issue.
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36. Change in guidelines governing the recruitment of fresh graduates. 37. Amendment of the new regulation. 38. Johnsons desire to be the President of the company. 39. Very few candidates in fray for the top post . 40. Present Presidents imminent retirement. DIRECTIONS for Q.41 45: For the following questions, select the best option. 41. As far as the personality traits of Sigmund Johnson are concerned, which of the following cannot be derived from the passage? (1) Enterprising nature (2) Irreverence for seniors (3) Meticulousness (4) None of the above 42. Johnsons request to Mr Moody for a transfer to the Seattle plant was granted. (1) True (2) False (3) Not relevant (4) Cant say 43. The author is most likely to agree with the idea that (1) had it not been for the few contenders for the top post of the President of the company, Johnson would never have even thought of it. (2) had it not been for the intensive technical knowledge of Sigmund Johnson no one in the company would have objected to his becoming the President. (3) the role of previous experience in the company has been seriously undermined by the new regulations governing promotions . (4) None of the above. 44. The company for which Johnson worked was headquartered at (1) Boston (2) Seattle (3) Chicago (4) Indeterminate 45. The total number of promotions received by Johnson, as per the passage, was (1) (3) 6 8 (2) (4) 7 None of the above
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DIRECTIONS for Q.46 50: In the following questions, there is a short passage followed by a question. Choose the alternative which most logically follows the idea or information given in the passage. 46. The rupee continues to fall against the dollar, despite all the tough steps the RBI has taken. Oil Prices continue to remain high And theres reason to believe consumer demand may be bottoming out. So, even the few silver linings amid the dark clouds enveloping the economy seem tarnished. Silver lining , most probably refers to (1) (2) (3) (4) Golden clouds that adorn the evening sky. Tough steps taken by RBI. Hope of economy revival. Data insufficient.
47. The Indian government has spent the last six months figuring out how to protect the automobile industry. Raising tariff barriers is not an option because under the WTO agreement, India is committed to opening up its markets. Whats the long term solution then ? (1) (2) (3) (4) Lowering the prices of vehicles. Making the auto industry more competitive. Levying antidumping duties. Signing out of the WTO agreement as it kills local industries.
48. There are people in the workplace who interview well. They dress sharply and have superb communication skills. Any one of these qualities makes a strong impression on the interviewer. But before you allow one impressive feature to influence your opinion of the candidate as a whole, find out if he or she is equally strong in other areas. The essence of the passage is (1) (2) (3) (4) Good communication skills are very necessary to succeed in interviews. While interviewing, one has to take care that, all facets of a candidate are tested. A person can be excellent in one area and average in others. Both (2) and (3).
49. A large part of the story behind the successful exports has been the adaptation of western designs by India exporters, keeping in mind the changing preference of the clientele abroad. It can be said that (1) (2) (3) (4) Earlier designers were not modern. Earlier designers did not know clientele taste. Understanding clientele preference leads to growth. Indigenous designers are very rustic.
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50. Beer and Indian-made foreign liquor are routinely filled into bottles that may have been used before, or that has probably had other contents previously possibly dirty or hazardous-before getting back onto the bottling line. It can conveniently be inferred that (1) Liquor is not good for health. (2) Bottles are undoubtedly recycled. (3) Beer is freely available in Goa. (4) Foreigners consume more beer than Indians. 51. Far-flung operations all over the world prompted a construction corporation to call on Expert sites. They needed a sophisticated communications system to keep their construction superintendents in contact with their offices and with each other. Analysis concluded that they could deal directly with major communication corporations to gain the services they needed and any outside assistance was not necessary. This company sought professional help instead, stating a goal of immediate implementation to make instant communications possible and to learn from them how to use the new capabilities with minimal disruption of work. The main reason for the construction firm to approach professional help was (1) To modernize their accessories. (2) To speed up the communication between various offices. (3) To give technical support to the employees. (4) None of the above. 52. Looking to increase in sales, a company created a website to complement other marketing avenues. Their marketing statistics had proven that putting a catalog in the hands of potential customer resulted in sales. The goal of the web site was to distribute catalogs to interested customers. Results were realized immediately: the bottom line of sales increased just as predicted by the companys research! The reason for increased bottom line of sales was (1) Hard work on the part of employees. (2) A well chalked out plan of advertising and marketing. (3) Making the customer feel important by placing a catalog in his hands. (4) None of the above. 53. A nationally-known advertising agencys website had produced no results for an international manufacturer after more than a year online. The sites lack of response was analyzed and a new user-friendly website was developed, with the goal of opening new marketing avenues for the companys products. Results were immediate! Within a week of the new web sites publication, the company received inquiries from prospective dealers and customers in two countries that had been targeted. What could have been the reason for the failure of earlier website (1) It was not user-friendly. (2) It did not include graphics. (3) Home page was not attractive. (4) It lacked 3-D effects.
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54. Bottle manufacturers in India are increasingly threatened by widening re-use of bottles, to the extent, that some manufacturers are now looking to export even at unremunerative prices. Threat to bottle manufacturers can be curbed by (1) (2) (3) (4) Raising import tariffs. Reducing export tariffs. Strengthening the bottle-manufacturers lobby. Discouraging the reuse of bottles.
55. A Florida residential communitys debut on the World Wide Web had a very specific goal: attracting qualified home buyers from up north and abroad. Using stateof-the-art technology, lavish photo displays were designed that downloaded quickly. Immediately following publication in 1996, serious responses came in from Europe, the Caribbean, Canada and the northeastern US. Which of the following possibly attracted the buyers most? (1) (2) (3) (4) Excellent home page. Excellent content. Lavish photodisplays with small download time. The cost competitiveness of products.
Case No. 2
For the past three years, R K Sinha, head of the regional firm RKS Packaging Ltd, had been seriously considering the use of government grade labeling for its high quality canned fruits and vegetables. Having enjoyed an excellent reputation with the public under the trademark Taste for more than 30 years, these canned goods were known throughout the area by distributors and consumers alike as among the best. The grade-labeling problem had come to the fore as the result of a new food supermarket chain called Rapid. The new chain, a national organization, was making a deep penetration in the region by spending a sizeable portion of its large advertising and promotion budget for pushing its own private brands of frozen and canned fruits and vegetables. Its advertising emphasized that the public could find both grade and descriptive labeling on each package and can. The descriptive labels listed the type of food, the can size, the number of servings per can, the net contents, and the name and address of the chain. Sinha had always paid careful attention to the descriptive labeling on RKS products but had been most reluctant to commit the company to the use of grade labeling. Sinhas reluctance was supported by the companys advertising and promotion manager and the production boss, who believed with him that grade labeling could hardly bring out the fresh flavor and taste upon which the company prided itself and had been able to capture through its own special heating, processing, and canning techniques. A factor that seriously concerned Sinha in the use of grade labels on canned fruits and vegetables was the possible use of a high grade on one of the grading characteristics to offset a low score on another. This method could hardly help RKS, whose pack was
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known by distributors and consumers alike to be much better even than the highest grades of its competitors. While Sinha was pondering this problem, he mulled over what he had read about grade labeling. In the first place, grading and labeling of canned foods had been developed to protect and help the consumer. Through the Department of Food, national standards had been set up for standardization, grading, and inspection work. To encourage voluntary use of these standards, the Department of Food hired inspectors who carried out the national inspection program at production facilities. For canned fruits and vegetables, the grades were A, B, and C, which were based on such criteria as uniformity, succulence, and color not flavour or food value. Sinha certainly agreed that grade labeling could provide additional information for the consumer. RKS could also use it in company advertisements to supplement its own descriptive labels. But didnt everyone know about the taste and quality of RKS products? He also wondered what happened when a company using grade labeling saw the qualities of fruits and vegetables change from year to year. At one period, that quality might be high for most growers; it might also be low during another. Some factors that were very important in their effect on consumer choice could not be subjected to a grading discipline. For example the range of individual tastes was impossible to standardize. Certainly taste, Sinha felt, should be at least as important as the other more tangible criteria used to grade canned goods. Sinhas legal advisor pointed out that there was another aspect to the problem of grade labeling. He had been informed by colleagues employed at the Department of Commerce that while the present use of standards was voluntary, such use might become mandatory in the not too distant future. His contacts explained that their information was based not on present government plans, but on possible legislation. The scenario went like this. Several consumer organizations were active in promoting truth in labeling legislation. Their objective was the provision of more information on packaging so that consumers could make better decisions on what products to buy. Simply put, it was argued that consumers could not distinguish between competing products on the basis of present labeling requirements. Present labels contained only the manufactures name and address, the fact that the contents conformed to food standards, and net weight. No mandatory criteria existed for grade standards. Consumers could judge quality only on the basis of trial and error, by trying the product or by reading the advertised claims of competing brands. Government officials believed that if several of the larger consumer organizations combined efforts to lobby in parliament for passage of consumer legislation, there was an even chance that a truth in labeling law could be passed within a year. Sinha weighed the findings of his legal advisor. He realized that, while taste was the ultimate criterion for choosing one brand over another, the initial choice of a particular brand could be influenced by product grade. Moreover, since RKS products were of the highest quality, they would undoubtedly carry the highest possible grades. Sinha was most concerned about the timing of a decision to accept product grading, which was at the present time still voluntary. Would it be to RKS advantage to adopt a voluntary labeling program, or would it be better to wait until grading became mandatory for all processors? What advantages and disadvantages would result from taking a wait and see attitude, rather than immediately commencing a voluntary grading program? Before Sinha completed his study of the problem, one of his leading competitors, New Foods, commenced a voluntary label standardization program. Sinha was worried about the possibility that some of New Foods products might be designated grade A quality.
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New Foods could quickly exploit this advantage at the expense of RKS. Thus, grading had now become a competitive issue. Sinha felt that he had to make a quick decision one way or the other. The case-study has highlighted the decision to be taken by Sinha regarding whether or not to adopt the governments voluntary program. DIRECTIONS for Q.56 65: With reference to this decision, categorise the following question as (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a major assumption made while making the decision. (4) an unimportant issue. 56. Establishment of a new supermarket chain. 57. Likelihood of the legal advisors opinion to be true. 58. Effect on sales of grade labelling of RKS products. 59. Maintaining the RKS brand image. 60. Likelihood that grade labelling would become mandatory. 61. Penetration of supermarket chain Rapid . 62. Influence of consumer groups on government actions. 63. New Foods labels. 64. The 30 years of experience behind RKS packaging company . 65. Maintaining quality of RKS products . tututu
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Solutions to Classroom Exercise

1.(2) 11.(1) 21.(4) 31.(2) 41.(4) 51.(2) 61.(2) 2.(3) 12.(2) 22.(4) 32.(4) 42.(2) 52.(3) 62.(4) 3.(5) 13.(5) 23.(3) 33.(3) 43.(4) 53.(1) 63.(2) 4.(2) 14.(2) 24.(1) 34.(2) 44.(1) 54.(4) 64.(4) 5.(1) 15.(2) 25.(1) 35.(2) 45.(3) 55.(3) 65.(1) 6.(3) 16.(3) 26.(2) 36.(5) 46.(4) 56.(2) 7.(5) 17.(2) 27.(3) 37.(1) 47.(2) 57.(3) 8.(4) 18.(1) 28.(2) 38.(2) 48.(2) 58.(2) 9.(1) 19.(2) 29.(1) 39.(3) 49.(3) 59.(1) 10.(1) 20.(3) 30.(3) 40.(4) 50.(2) 60.(3)
Explanation
1. 2. 3. 4. 5. It is clearly mentioned under the heading Advantages, that 90% of Wingfleets business is with U.S.Government. Hence (2). It is again mentioned under the heading Advantages, that, ... sales revenue is dependent on federal budget . Hence (3). Given in 4th para. Given in 5th para. Mentioned in the 2nd para - ....... recommending that the company should bid on a new military - transport plane, the 2L 1000. Mentioned clearly in the 8th para. Mentioned clearly in the 6th para. Given clearly in the 9th para. Mentioned clearly in the 10th para. Clearly mentioned in the opening line of 11th para. Undoubtedly this is a major objective. It is clearly mentioned in 8th para that, John Franco, wonders if Congress would approve of an appropriation. Hence it is a major factor. No where in the passage has this point been mentioned. Hence it is an unimportant issue. It is clearly given in the last line of para 4 that, ....... slight alteration in design, will make an excellent commercial plane........ Hence it is a major factor. It is again a major factor because it has been clearly mentioned in para 3 that, ...... sales revenue is dependent on federal budget . Here attention is to be paid as to why it is a minor factor and not a major factor. In 10th para it has been mentioned explicitly that, ..... this money will not solve Wingfleets poor cash position. Hence it cannot be a deciding factor. 17. It is a major factor. It is to be understood that though down payment is not a critical factor but Wingfleet getting order of 201 civilian planes is a major factor as it shows the correctness of their decision. Obviously this is a major objective. Mentioned in 3rd para last line. It ought to be a major factor. It is only a minor factor. Data is insufficient as it is not mentioned whether Ps name was entered in the prescribed register or not. Ans.(4) It can clearly be inferred that both, section 62(1-A) and 66 have been violated. Ans.(4) It is clearly mentioned in section 66 that women shall be allowed to work only between 6 am and 7 pm. Ans.(3) The women are enrolled as workers. Ans.(1) The obvious and most logical choice. Ans.(1) Choice (1) is absurd, choice (4) is out of context. Out of (2) and (3), (2) is more logical. Ans.(2) Premium refers to the difference between actual value and par value. Ans.(3) (2) is the obvious choice. Ans.(2) Option (1) seems to be the most logical. Ans.(1) Option (3) is the most logical pick. Ans.(3) incomprehensible maze, simplify and manageable set of standards are the key words which point to answer (2). Ans.(2) Opening line gives us the clue. Ans.(4) It is directly mentioned that highest percentage of engineers and technical workers are from Asia. Singapore is the only Asian country out of the given four. Ans.(3)
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18. 19. 20. 21.
6. 7. 8. 9. 10. 11. 12. 13. 14.
22. 23.
24. 25. 26.
27. 28. 29. 30. 31.
15. 16.
32. 33.
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34. 35.
(2) is the obvious choice. Ans.(2) Nanotechnology basically deals with very small sized components. Hence (2). Ans.(2) It is clearly an unimportant issue as the main aim of Johnsons opposition is concerning his promotion only. Ans.(5) It is clearly the objective of Johnsons opposition. Ans.(1) It is a major factor because it is this desire on Johnsons part that led him to oppose the regulations. Ans.(2) It is at the most a minor factor as Johnson feels confident that his chances of becoming the President are very bright and that wont be affected much by the presence of other candidates. Ans.(3) It is an assumption as Johnson simply had a notion that the present President can retire any day. Ans.(4) 1st and 3rd are clearly traits of Johnson. As far as option (2) is concerned Johnsons barging into Presidents Chamber shows that he did not respect his seniors. Hence option (4). Ans.(4) It is clearly mentioned in the last sentence of 2nd para that Johnson was shifted to Chicagos most modern hydraulic shop. Ans.(2) (1) and (2) can be ruled out. (3) is partly correct as it is mentioned in the 4th line of last para that Johnson had already received all the promotions due to experience and hence that advantage was over. Hence, option (4). Ans.(4) Clearly mentioned in 3rd line of 3rd para. Ans.(1) It can be easily deduced from the passage. Ans.(3) It has not been mentioned that silver lining refers to what. Ans.(4)
47. 48. 49. 50. 51. 52. 53.
We are talking of a long term solution and (2) is the only suitable choice. Ans.(2) Though both (2) and (3) are right, the essence of the passage is in (2). Ans.(2) (3) is the only feasible choice. Ans.(3) The passage talks about bottle recycling and its ill-effects. Ans.(2) (2) is the obvious choice. Ans.(2) It is directly mentioned in the passage. Ans.(3) It has been mentioned that the new web site was user friendly and it became successful. It only indicates that earlier website was not user friendly . Ans.(1) Discouraging the reuse of bottles can be the only solution. Ans.(4) It can be directly inferred. Ans.(3) Given in Para 2. It was the introduction of this chain that spurred management to action. Ans.(2) Read the 4th line of Para 7, The information was based not on government plans but on possible legislation. Hence, it is an assumption. Ans.(3) It is undoubtedly a major factor. Ans.(2) It is the major objective. Ans.(1) Read 3rd line of para 7 which tells that, while the present use of standards was voluntary, such use might become mandatory,. Hence it is an assumption. Ans.(3) It is a major factor as can be inferred from para 2. Ans.(2) It is clearly an irrelevant factor. Ans.(4) It was the introduction of new food labels that made Mr. Sinha think. Hence, it is the major factor. Ans.(2) It is but an irrelevant factor. Ans.(4) Obviously it is one of the major objectives. Ans.(1)
36.
37. 38.
39.
54. 55. 56.
40.
41.
57.
58. 59. 60.
42.
43.
61. 62. 63.
44. 45. 46.
64. 65.
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BJ Test No. 01
For all questions, mark the answers in the SCORE SHEET that is provided AT THE END. Please fill all ovals properly with an HB pencil / pen. Scratch work has to be done on test paper itself. You may use a pen or a pencil.
Time allowed : 20 mins
T o t a l q u e s t i o n s : 20
Case No. 1
Prakash Chemicals Ltd. is one of the largest manufacturers of special inorganic chemicals. It started as a small local level organisation and gradually grew into a nationally recognised and reputed corporation. The company was able to achieve such a rapid rate of growth primarily because of its quality consciousness and employee satisfaction with the company. However, the liberalisation process set in motion by the current government led to the import duties on some of the items of the range produced by Prakash Chemicals getting reduced drastically. This created a stiff competition in the market and ultimately the company decided to close down some of its manufacturing operations. This meant that the company would have to close down its branch office at Lucknow. The company had been steadily following a policy of excellent remunerations and job security but it was now forced to retrench some of its workforce. Another relevant policy the company had been following was that in case of an employee losing a job due to reasons external to the company (like the present ones), he/she would be given preference for a similar job over external candidates in the event that any of the company offices would have a vacancy. Within a month of the retrenchment taking place, the company had the vacancy of an office secretary at its Ahmedabad branch. The Branch manager Mr. Satpal Sharma advertised in the newspapers regarding the vacancy. At the same time, he requested Mr. Pratap Khanna, the former secretary at the Lucknow branch to come for an interview. After a tough selection procedure for the external candidates, Ms. Seema Gupta was short listed for the post. Now Mr. Sharma was in a fix. Though the company policy dictated that Khanna should get the job, Ms. Gupta was definitely a better candidate. She had more work experience and better educational qualifications. Besides, she also had good offers from other firms. After a grueling week, Mr. Sharma decided to appoint Ms. Gupta fervently hoping that she would stick to the job. When Khanna came to know about it, he immediately lodged a complaint with the General Manager at the Mumbai headquarters of the company. The General Manager called Mr. Sharma for an explanation. Outcome: The General Manager called Mr. Sharma for an explanation.
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DIRECTIONS for Q.1 6: The case presents a typical business situation and an outcome. Considering Mr. Sharmas decision to appoint Ms. Gupta, categorise the following as (1) (2) (3) (4) (5) 1. 2. 3. 4. 5. 6. a major objective in making the above decision. a major factor in making the decision. a minor factor in making the decision. a major assumption made while making the decision. an unimportant issue.
The company policy of excellent remunerations and job satisfaction. Better educational qualifications of Ms. Gupta. Selection of the best possible candidate. Governments liberalisation process. Ms. Gupta taking up the job offered by Mr. Sharma and sticking to the company. Overall merit of Ms. Gupta.
DIRECTIONS for Q.7 16: For each of the items, select option number. (1) if the item contradicts or is not situation or with the outcome. consistent with the factual
(2) if the item very strongly explains the outcome. (3) if the item can be deduced from the actual situation. (4) if the item cannot be deduced. 7. 8. Mr. Sharma overlooked companys guidelines in the matter of appointing Ms. Gupta. Governments liberalisation process was the main reason for the problems of Prakash Chemicals Ltd.. It was Mr. Sharmas grudge towards Mr. Khanna that led. Mr. Sharma to choose Ms. Gupta.
9.
10. Monopoly of Prakash Chemicals in the market was the main reason for its rapid growth.
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11. The management holds the opinion that the interests of the company have higher priority than personal interests. 12. Within a month, the business prospects of the company started brightening up. 13. In times of pressure, even the best companies are forced to change or modify their policies. 14. Inspite of starting at the local level, Prakash Chemicals Ltd. had a meteoric rise in a very short span of time. 15. The companys head quarters in Mumbai gave it an added advantage of greater exposure. 16. There were only two candidates for the post of office secretary. DIRECTIONS for Q.17 20: In the following questions, there is a short situation/ passage followed by a question. Choose the alternative which most logically follows the idea or information given in the situation/passage. 17. Picture this. Its the middle of the day and your factory workers are working against the clock to meet export orders. Theres a knock on the door and a motley bunch of people from an NGO walk in and demand a closed-door session with some of your workers. Dont close the door on them. It just might be the end of your export orders. What can be the most probable reason for NGO visit ? (1) (2) (3) (4) Propagation of spirit of workmanship. A checkup of working conditions in the firm. They may be terrorists in disguise. Meeting their relatives.
18. Call it backward integration These days, Pune-based Daniel Fertiliser doesnt just sell fertiliser to farmers. Instead, it offers soil management advice, high quality seeds and, of course, its own brand of fertiliser. The trigger ? Apparently, the soil in India is generally deficient in sulphur. DFIL has been importing and selling sulphur-based fertiliser (called Benzosulf) to improve soil nutrition. Soil rebuilding costs money, but it is possible to reclaim more such arid land, and, thus, increase the area under crop in India. Yellow could well be the colour of the next green revolution. Yellow revolution can most probably refer to (1) (2) (3) (4) Yellow colour of the soil. Yellow being soothing to eyes. Sulphur which is yellow in colour and would revolutionise agriculture. Yellow being trendy in fashion.
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19. Having discovered the larger marketing potential of mega events and celebrity shows, marketers today want events to be an integral part of all customerrelationship management. The challenge before any serious event manager is not just the activity, but to effectively communicate with the consumers and manage the post-event relationship. If the industry estimates are anything to go by, events will garner increasingly more of the marketers promotion funds. Mega event can serve as brand advertisers . (1) (2) (3) (4) Agree. Disagree. Cant say as information is insufficient. Irrelevant.
20. It is very difficult to estimate the size of the market, even though lots of people are still jumping in. In that sense, an online education market doesnt exist in India today. Remember, online education can never substitute the teacher. It can supplement whats taught is schools and colleges. Thats the crux here: learning can be enhanced. So, both online and offline education models will co-exist. On line education will (1) (2) (3) (4) outweigh the classroom training. will supplement classroom learning. create a hollow society based on coded knowledge. is the need of the hour. tututu
Please make sure that you mark the answers in this score-sheet with an HB pencil. The marking of answers must be done in the stipulated time for the test. Do not take extra time over and above the time limit.
SCORE SHEET
1 2 3 4 5
1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5
6 7 8 9 10
1 1 1 1 1
2 2 2 2 2
3 3 3 3 3
4 4 4 4 4
5 5 5 5 5
11 12 13 14 15
1 1 1 1 1
2 2 2 2 2
3 3 3 3 3
4 4 4 4 4
5 5 5 5 5
16 17 18 19 20
1 1 1 1 1
2 2 2 2 2
3 3 3 3 3
4 4 4 4 4
5 5 5 5 5
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BJ Test No. 02
Case No. 1
Indiana Foods have introduced a new product, Nutrifit, to combat the problem of hidden hunger in developing countries. Conceptualised in association with leading health authorities, the introduction of Nutrifit demonstrates both a technological product innovation and an institutional innovation from the groups involved. The development and clinical evaluation of Nutrifit was part of a collaborative effort between scientists at the Indiana Foods Nutrition Science Institute and leading health experts at UNICEF, the Micronutrient Initiative and Cornell University. Dr. Singer Wilson a Cornell Professor of Nutrition and world-leader in micronutrient deficiency, was looking for a great-tasting beverage for children, fortified with iron, Vitamin A and iodine that could be tested to determine whether it was effective in preventing hidden hunger. He approached Indiana Foods because of its expertise in food formulation and its nutrient fortification technology (with these three ingredients in particular). As a result, Indiana Foods developed Nutrifit, a product containing Growth Plus, a patented source of iron, Vitamin A, and iodine. Test results from an independent clinical study have shown that the nutrients in Nutrifit help children grow significantly better, and boost mental alertness and performance. Based on these results, Indiana Foods formed a strategic alliance with UNICEF and several local government institutions that have begun taking steps to address the problem of hidden hunger, and test market Nutrifit in the Philippines. The purpose of the alliance is to more effectively combat hidden hunger in the Philippines by raising awareness of the problem and how to prevent it. Indiana Foods also consulted with these health experts and public health officials to ensure Nutrifit was broadly affordable in the Philippines. Nutrifit fits well with Indiana Foodss vision for its food and beverage business. That vision focuses on developing foods that provide superior health and nutrition benefits, on a global scale. Nutrifit is expected to be re-launched in other countries in the near future.
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DIRECTIONS for Q.1 7: With reference to vision of Indiana foods choose. (1) if the item contradicts or is not consistent with the factual situation or with the vision. (2) if the item very strongly explains the vision. (3) if the item can be deduced from the actual situation. (4) if the item cannot be deduced. 1. 2. 3. 4. 5. 6. 7. Launch of Nutrifit was a painstaking process. Iron, vitamin A and iodine are vital for a childs development. Philippines had very acute problem of hidden hunger. Launch of Nutrifit by Indiana Foods. Nutrifit incorporates both technological innovation and institutional innovation. Philippines is a developing country. Mr. Wilson working with Indiana foods.
DIRECTIONS for Q.8 13: These questions are based on a section of the Workmens Compensation Act 1993. Employers liability for compensation (Sec. 3) An employer is liable to pay compensation to a workman for (1) personal injury caused to him by accident (2) occupational disease contracted by him. Personal injury by accident, Section 3(1) An employer is liable to pay compensation to a workman if personal injury is caused to him by accident arising out of and in the course of his employment. Provision: An employer is not liable to pay compensation for personal injury caused to a workman by accident arising out of and in the course of employment. (1) if the injury does not result in the total or partial disablement of the workman for more than 3 days; (2) if the injury not resulting in death, is caused by an accident which is directly attributable to (a) the workman having been at the time of the accident under the influence of drink or drugs; or (b) the wilful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen; or
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(c) the wilful removal or disregard by the workman of any safety guard or other device (which is an offence under the Factories Act. 1948) which he knew to have been provided for the purpose of securing the safety of the workmen. Occupational diseases, Section 3(2) Workers employed in certain occupations are exposed to certain diseases which are inherent in those occupations. As such, the employer is liable to pay compensation if the disease can be directly attributable to a specific injury by accident arising out of and in the course of employment. Provision: No compensation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out and in the course of his employment. In each of the following questions given below mark: (1) if the employer is liable for compensation under the Workmens Compensation Act. (2) i f t h e e m p l o y e r i s n o t l i a b l e f o r c o m p e n s a t i o n u n d e r t h e Workmens Compensation Act. (3) insufficient information regarding situation at hand. (4) i n s u f f i c i e n t i n f o r m a t i o n g i v e n a b o v e w i t h r e s p e c t t o t h e Workmens Compensation Act. 8. A watchman whose duty was to guard the property of the premises of a Rest House had his quarter within the premises of the Rest House. His duty ended at 11 p.m. At 2.30 am. (i.e., within 3 hours of the said 11 p.m.) the guest house was found ransacked and the watchman found murdered near his quarters. A workman was killed by an accident arising out of and in the course of employment. But the accident had been caused by his wilful disobedience to an order issued for the purpose of securing the safety of workmen.
9.
10. A boy employed in a shoe factory took home a pair of boots for repairing them in order to improve his skill. This he did contrary to the orders of authorities. While repairing the boots at home he injured an eye and it had to be removed. 11. Sukhiram finished his shift. And left for home, only to return an hour later, on remembering that he had forgotten his lunch-box. As he headed towards the locker room, a heavy piece of machinery fell from an overhead gantry, and Sukhiram died instantly.
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12. Dukhiram was a particularly enthusiastic eager-beaver, who frequently worked after his normal shift-hours to improve his skills. The shift-manager had frequently made it very clear that this was unnecessary, and Dukhiram would earn no over-time for his extra efforts. On one such occasion, when Dukhiram was working beyond his normal shift, his hand was seriously injured. 13. A workman is going to attend his work and is involved in an accident in the course of journey. DIRECTIONS for Q.14 18: For the following questions, choose the alternative which most logically follows the idea or information given in the statements given below. 14. Living wage is a wage which we can offer to an employee as incentive to work and to produce enough in quantity. (1) A literate and intelligent worker will use living wage for steady rise in his standard of living. (2) It is a boon to workers in highly developed countries. (3) Illiterate, backward and ignorant workers waste the remuneration given by living wage on vices such as drink, gambling etc. (4) The components of living wage are bare necessities, insurance cover against ill-health, allowance for expenditure on childrens education, recreation and provision for saving. 15. Collective bargaining has been considered as a form of industrial democracy and industrial government. (1) In collective bargaining, the agreement is usually written in the form of a contract. (2) Collective bargaining is an agreement under which the employees and employers undertake to resolve their problems through negotiation either between them or with the assistance of a third party. (3) It does not indicate voluntary conciliation and voluntary arbitration. (4) It deals with the relations between trade unions and the management representatives. 16. Industrial licensing helps to regulate effectively all industrial activities in a mixed economy and is an instrument for achievement of growth, self-reliance, social and destructive justice. (1) A licence is an official written permission to start and run an industry. (2) When an application for an industrial licence is made, a letter of intent is issued within a reasonable time. (3) The licence provides all essential details such as location, articles to be produced, the capacity of the industrial unit etc. (4) Delay and higher cost in the processing of application lead to corruption.
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17. When a trade agreement or practice has the effect, actual or probable of preventing, restricting, lessening or suppressing competition, it is liable to be regarded as a restrictive agreement or practice. (1) The MRTP Act 1969, provides machinery to prohibit a restrictive trade practice when the same is found to be prejudicial to the public interest. (2) The party has no obligation to prove that the restriction is necessary in the interests of business. (3) The difficulty can be overcome by tipping the authorities suitably. (4) There are nearly nine public interest gateways to the business enterprise to avoid the enforcement of the Act. 18. Taylorism is the name given for scientific management since Taylor contributed a lot in the field of higher or the top management. (1) Orthodox management was usually based on intuition, tradition, custom or guess work. (2) The policy was determined through trial and error without pre-planning. (3) The decision making process is based on certain principles and laws derived by the process of scientific investigation of the methods to be adopted. (4) The managers develop a science for each element of mans work, replacing the old rule of thumb method.
Case No. 2
A new product system from MP Solar, the multifunctional solar facade, combines a double facade with a building-integrated photovoltaic system to produce both electricity and heat as well as a structural component. MP Solar is a wholly owned subsidiary of MP that manufactures and supplies solar photovoltaic power systems. For 27 years, they have supplied products to 160 countries from their 20 factories and offices around the world. As part of their product portfolio, MP Solar have designed integrated solar installations, a multifunctional solar facade system that serves as a building component, and at the same time generates electricity used by the building. This system can be used in new buildings as well as in existing structures, where they can extend an older buildings life through replacement of existing panels. In both instances, the integrated faade system demonstrates that the value of solar technology is not only via the renewable energy it generates, but also via its dual function as a replacement building material. This ability to substitute conventional building materials also has a positive impact on the final customer price. Costs per square meter of the solar setup vary between US$200 to US$650 per square meter, without allowing any offset value. In comparison high value building material like polished stone can be US$2000 per square meter, glass walls US$500, stainless steel US$200; hence this multi functionality offers new ways to increase the take up of the technology. Expected Result: A Popular choice amongst customers
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DIRECTIONS for Q.19 25: The case presents a factual situation and an Expected Result. For each of the items, select option number. (1) if the item contradicts or is not consistent with the factual situation or with the Expected Result. (2) if the item very strongly explains the Expected Result. (3) if the item can be deduced from the actual situation. (4) if the item cannot be deduced. 19. The recent product of MP-Solar is multifunctional. 20. Multifunctional solar facades can be used only in new buildings. 21. Affordability of multifunctional solar facade system. 22. MP is a highly diversified group. 23. The newest product of MP-Solar is versatile in use. 24. The solar setup is costly compared to other building materials. 25. Multifunctional solar facade is robust and gives rigidity to structure.
SCORE SHEET
1 2 3 4 5 6 7
1 1 1 1 1 1 1 2 2 2 2 2 2 2 3 3 3 3 3 3 3 4 4 4 4 4 4 4 5 5 5 5 5 5 5
8 9 10 11 12 13 14
1 1 1 1 1 1 1
2 2 2 2 2 2 2
3 3 3 3 3 3 3
4 4 4 4 4 4 4
5 5 5 5 5 5 5
15 16 17 18 19 20 21
1 1 1 1 1 1 1
2 2 2 2 2 2 2
3 3 3 3 3 3 3
4 4 4 4 4 4 4
5 5 5 5 5 5 5
22 23 24 25
1 1 1 1
2 2 2 2
3 3 3 3
4 4 4 4
5 5 5 5
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BJ Test No. 03
Case No. 1
Foodoo India, a significant player in the processed foods market in India is on the verge of launching a number of processed food products. Among the products lined up for launching are: Name Category Expected Market size (Rs. Cr.) Vego Ready to Cook Vegetables 60 Cheeso Cheese Spread 100 Drinkoo Health Drink 50 Floura Wheat flour 500 The market for most of the processed food categories that exist in a lot of developed countries does not exist in India at all, because of the Indian propensity to avoid processed foods. But some changes are being seen in the Indian attitudes now as the exposure to western influences increases. The major competitors of Foodoo in the processed foods market are Swastik Limited, Alfa, Parina and Indian Foods. The market shares of the various participants are: Swastik 40% Alfa 8% Parina 7% Indian Foods 12% Foodoo 10% Unorganised sector Rest. Swastik Ltd. is the market leader and it is difficult for any of other players to match it in terms of financial strength, new brand launches, product line width etc. though Foodoo with its line-up is getting ready to do the unthinkable. But Foodoo marketing team is not sure whether it should launch all these products simultaneously, in a staggered manner or at all.
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With reference to the decision to be made, categorise the following question items as: (1) (2) (3) (4) (5) 1. a major objective in making the above decision. a major factor in making the decision. a minor factor in making the decision. a major assumption made while taking the decision. an unimportant issue.
Mckinsey & Co. the global consultants have come out with a report specifying the size of Indian processed food sector to be Rs. 26,000 crores. Indian Housewives do not allow infringement of their cooking duties. Processed foods consumption is increasing as India becomes economically more prosperous. Ensuring the success of the new brand launches in face of the cut throat competition prevailing. A widely circulated report from dieticians saying that health drinks do not have any nutritional benefit. Indians preferring freshly ground flour to the processed flour . A survey indicating that inspite of their health effects, Indians prefer butter as a bread spread for their breakfasts. Indian Foods displacing Swastik Limited as the producer with highest market share in Ice-Cream market. Alfa a US MNC introducing its Alfa brand flour in the Indian market targeting the premium segment constituting 10% of the total flour market.
2. 3.
4.
5.
6. 7.
8.
9.
10. Foodoo winning the race to be the retail partner of Indian Oil Corporation at its retail outlets. 11. Government of India losing a ruling at the WTO Disputes Settlement Panel regarding the non-quantitative restrictions it has imposed on import of consumer goods. 12. Indian psyche of seeking quality at comparatively lower prices. 13. Out of the Rs. 20,000 crore processed foods market the share of unorganised sector is (Rs.) (1) 4600 cr (2) 4.6 billion (3) 4600 million (4) None of the above.
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14. The size of "Ready to Cook Vegetables" market is n times the size of Wheat Flour market. Then the value of 'n' is (1) 0.21 (2) 0.12 (3) 1.2 (4) 2.1 15. Alfa is based is the state of (1) Gujarat (3) Maharashtra
(2) (4)
Ahmedabad None of the above.
DIRECTIONS for Q.16 23: In the following questions, there is a short passage followed by a question. Choose the alternative which most logically follows the idea or information given in the passage. 16. The government has now revived the Disinvestment Commission. The new commission will advise the government on disinvestment related issues, and will take into account things like employee interest when making its recommendations. But how will it tackle the core issue that is holding up disinvestmentthe refusal of politicians and bureaucrats to give up control over public sector undertakings? Thats not the agenda at all. From the passage it can be inferred that (1) (2) (3) (4) Disinvestment Commission will be very effective in speeding the disinvestment process. Disinvestment Commission will be ineffective. Disinvestment Commission does not address the core issue that impedes disinvestment process. Disinvestment Commission is a political gimmick.
17. Marketers say innovations arent just a nifty way of luring consumers, but also a means of reaping long-term benefits. For instance, in an imitator market like that of durables, even a modest novelty helps differentiate the brand and the product. Then, theres the technology image that rubs on to the brand. The ultimate objective, however, is to make the consumer preceive better value for money in the new product. From the passage it can be inferred that (1) (2) (3) (4) Consumer preference is not the botheration of manufacturers. Product marketers are on their toes when it comes to innovation. Marketers are well versed in fooling the customers. None of the above
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18. Health isnt just a serious concern for a large section of the population, but it is an issue that cuts across age barriers. The fact that health sells is being put to good use by consumer durables marketers. LG, for instance, hawks the preserve nutrition system in its refrigerators, and Samsung promotes bio-fresh as the answer to keeping food in the refrigerator fresh. The underlying theme of the above passage is that (1) (2) (3) (4) refrigerators have a large market. the modern generation is relatively less healthy. health is wealth. marketers do not leave any marketing area unexplored.
19. Id like you to imagine the worst known disaster that could overtake your company. Visualise your office as a field of Antarctic icean endless white plain broken up by dangerous crevasses. Imagine that you are stuck there, and the nearest human being is 1,200 miles away. Look at those blocks of ice in the foreground. Those are your employees. You have to thaw them out, otherwise all of you will die. The passage underscores the fact that (1) (2) (3) (4) in business even ice can be sold. doing business is a very tough job. working with available resources is key to survival in business. Antarctica is not suitable for any business.
20. Even grocery sites keep going: webrishi.com in Mumbai, and bababazaar.com in Delhi. Bababazaar has managed to survive for three years, with average daily orders of Rs 2,000. Its CEOthe ultra-patriotic Indian Bharat Saxena has two vans to service clients and fulfill orders. Far from scaling back, Saxena is revamping his site and plans a larger scale of operations. If you can sell trust and provide value for money, you can sell anything on the net says Saxena. It can be inferred that (1) (2) (3) (4) on net, business is very rarely loss-making. grocery sites are favourites on net. net is very effective. None of the above
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21. While earlier business drove technology, today, it is technology that is the driving force behind all kinds of business. Hence, it is mandatory for todays leaders to understand technology, and also have a clear vision as to how technology can be best utilised in business. This is not all. A leader must also have the capacity to communicate this vision to all levels of the organisation. Which of the following is most true? (1) (2) (3) (4) Technology is a boon rather than a bane. Technology powers todays business. Innovation is the mother of all technologies. Life is dull without technology.
22. With import licensing gone and tariffs reduced, dumping into India has also become an issue. And with anti-dumping investigations started within the Department of Commerce in 1992, and the subsequent establishment of the Directorate General of Anti-Dumping in 1998, we are getting pretty good at using the antidumping agreement as a protectionist device. There were only two cases in 199293. But in 2000-2001, there have been 26 cases. Out of 89 cases since 1992, final anti-dumping duties have been imposed in 64 cases. Provisional duties have been recommended in 19 cases and imposed in 16. Investigations are going on in six cases. Contrary to popular impression, 39 cases are for chemicals and petrochemicals, and pharmaceuticals chips in with nine. There have only been three cases against consumer goods. And in line with popular impression, 41 cases are against China, the EU contributing 21. It can be inferred conveniently that (1) (2) (3) (4) Dumping is illegal. Threat from China in it using INDIA as a dumping ground is not unreal. Dumping is legal. Dumping in pharmaceuticals sector is highest.
23. Feroze believes, and rightly so, that his portfolio companies are fundamentally strong. Therefore, he is loath to sell any of these right now, especially since that would mean booking a loss. While, we believe what Feroze is doing is the right thing, a caveat is in order. Which caveat is being referred to in the passage? (1) (2) (3) (4) Feroze has not considered the on going recession. Share prizes may further rise. The share prizes may go down and Feroze may book a loss. None of the above
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Case No. 2
Raja Shekhar Reddy, forced to come back to India after his fathers sudden death, who was the managing director of Reddy Metalum Ltd (RML), was encumbered with a lot of problems. Before this, Raja was having a powerful stake in a US based computer company VIGA. The Rs 100 crore RML manufactured the metalum used by heavy industries in their manufacturing process. The basic raw material metalum was found in Bihar. RML had its headquarters at Mumbai and works at Pune. About the company, Reddys recent findings were The industry was in the middle of a severe recession, with all the players making losses. More or less everyone thought that the cyclical nature of the industry was natural, and expected to make enough profits in an anticipated boom two years from now to offset the recent losses. The competitive rules of the metalum industry had not changed since the early 1980s. The units located in Bihar derived their competitive advantage from their lower cost structure while RML derived its competitive advantage from the companys ability to supply its customers in small lots in a near just-in-time manner. Moreover, imports were not a perceptible threat as the government had slapped a 25 per cent duty on the import of metalum. The company was at a great locational disadvantage as it had to pay high freight charges to transport its raw material from Bihar. There was, however, a metalum ore mine - with reserves for 50 years - located near RMLs production units. But the mine was closed as the reserves were so deep that conventional mining technology would not be cost-effective. To be sure, a new method of mining deep ore had recently been developed by a South American company. However, the cost of the new technology would be 25 per cent higher than the existing technology. But in spite of the cost constraint, the new mine could still be profitable for RML as the savings in freight costs would be immense. Production had stopped due to an acute shortage of working capital, which has been caused by the diversion of short-term funds for long-term purposes. RMLs workforce had become highly unionised and militant since 1988. Not only were there frequent strikes and go-slows, often, the management gave in to the work-forces exorbitant demands. The company was involved in a large number of cases with its suppliers and customers over payments and receivables. RML had been making losses primarily because of its high overheads, which were partly due to excess staffing. And nearly all the competent managers had left the company, leaving RML with the dregs of managerial talent. The culture of the organisation was bureaucratic and highly resistant to change. This lack of diversity in ideas was because most of the employees were from the metalum industry. Moreover, many employees, at all levels, were indulging in unethical practices to line their personal pockets. Finally, the threat of global players entering the country with world-class capacities and practices loomed large on the horizon. In the foreseeable future, these global heavy-weights would have to be reckoned with.
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Based on these findings, Reddy formulated a turnaround and a strategic plan, which, he hoped, would revive RML. DIRECTIONS for Q.24 33: With reference to the turnaround and strategic plan of Reddy, choose. 1. 2. 3. 4. if the item contradicts or is not consistent with the factual situation or with the turnaround and strategic plan. if the item very strongly explains the need for a turnaround and strategic plan. if the item can be deduced from the actual situation. if the item cannot be deduced.
24. RML was in bad shape. 25. Mr. Raja Shekhar Reddy was satisfied by RMLs present state. 26. Entry of global players would give a boost to RMLs prospects as RML will have competitive advantage. 27. The relationship of company with customers and suppliers was not very healthy. 28. Production capacities decreased by 25% due to acute shortage of working capital. 29. Raja Shekhar Reddy had huge experience in managing heavy industries. 30. The employees of RML were result driven and were marked with high degree of ethics. 31. Raja Shekhar Reddys hopes for a turn around were impractical as company was in a huge mess. 32. RML was highly adaptable to change. 33. Inspite of paucity of employees, company was in debts as employees were corrupt.
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Case No. 3
Saturn is taking a holistic approach to enhancing products and services to minimize environmental impacts. Innovations are not only improving production, but also reducing environmental impacts in the product use phase. This has led to the development of a number of technologies that help reduce the environmental impact attributed to consumer behavior during product use, service and disposal. Life cycle assessment points out that the major ecological burden of electronic products is due to the energy consumed in the use-phase of the product-life. European home consumer electronics consume 36 TWh (Terawatt-hour) and are forecasted to grow to 62 TWh by 2010 . Saturns SDM-N50 liquid crystal display incorporates a unique set of user features that directly reduces the energy consumption of the product. The 12mm, 3kg display features an energy saving infrared user sensor and an ambient light sensor. The user sensor automatically switches the screen to sleep mode (of a rate of less than 3 watts) if no one is sitting in front of the screen. The light sensor adjusts the brightness (and therefore energy consumption) of the display according to natural ambient light conditions of the room. Saturn is also developing technologies and services that contribute to the extension of product lifetime. For example, the ProGlobe television is a European prototype design aimed at establishing technologies for improved serviceability. The prototype technologies being developed include a unique chassis-design that allows serviceengineers to access the internal core of the TV at the consumers home (potentially reducing the travel burden and cost of TV service) and a one-click, eco-mode function giving the user the option of reducing the operational energy consumption of the TV by 25 watts (by adjusting the picture brightness). In addition, the ProGlobes new power circuit lay-out provides a remarkable level of 0.5 watt stand-by power consumption . Miniaturization and the shift to digital technologies have made product repair an increasingly difficult and specialized job. In Europe, Saturn has introduced the exchange and refurbishing program, an innovative service concept for the efficient repair of products with large sales volumes, such as the Walkman, Discman, PlayStation and mobile phones. In the case of a defect, a customer can exchange their product at the dealer for a refurbished model, or even for a new one (if a defect is found within the three month guarantee period from purchase). Defect products are collected and refurbished, broken parts are repaired or exchanged, and housing parts are checked at a central European location. Since factory-like repair is more efficient, average costs have been reduced by 25%. This way more product parts and components get the chance of a second life. For example, Saturn is achieving a 68% re-use rate for the plastic components of returned PlayStations. Virtually all of the remaining components that cannot be re-used are recycled. Aim: To make Saturn the undisputed king in consumer electronics.
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DIRECTIONS for Q.34 40: The case presents a company profile and its Aim. For each of the items, select option number (1) if the item contradicts or is not consistent with the factual situation or with the Aim. (2) if the item very strongly explains the Aim. (3) if the item can be deduced from the actual situation. (4) if the item cannot be deduced. 34. Saturns technology savvy and customer friendly attitude. 35. Decreasing product sizes help greatly in convenient product repairs. 36. Exchange and refurbishing program is cost effective. 37. Development of technologies by SATURN for the extension of product life time. 38. Exchange and refurbishing program can be used for any type of products. 39. The maximum environmental impact is in service phase. 40. SDM-N50 is not user friendly.
SCORE SHEET
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1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5
11 12 13 14 15 16 17 18 19 20
1 1 1 1 1 1 1 1 1 1
2 2 2 2 2 2 2 2 2 2
3 3 3 3 3 3 3 3 3 3
4 4 4 4 4 4 4 4 4 4
5 5 5 5 5 5 5 5 5 5
21 22 23 24 25 26 27 28 29 30
1 1 1 1 1 1 1 1 1 1
2 2 2 2 2 2 2 2 2 2
3 3 3 3 3 3 3 3 3 3
4 4 4 4 4 4 4 4 4 4
5 5 5 5 5 5 5 5 5 5
31 32 33 34 35 36 37 38 39 40
1 1 1 1 1 1 1 1 1 1
2 2 2 2 2 2 2 2 2 2
3 3 3 3 3 3 3 3 3 3
4 4 4 4 4 4 4 4 4 4
5 5 5 5 5 5 5 5 5 5
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BJ Test No. 04
Case No.1
In Gondwanaland, a populous country North of Canada, fear stalks every citizen. The fear of being the next victim of the "Invisible Extra Galactic Beings (IEGB)". For last few weeks, rumours are flying thick and fast and a mass hysteria seems to have gripped the entire public consciousness. The whole phenomenon started when it was reported by some sections of media that some "Unidentified Flying Objects (UFO)" unfamiliar saucer shaped objects had been sighted making landings in some remote corners of the island country. But no proof of it actually came forward. Then certain cases of people simply disappearing and reappearing after a gap of a few days came into notice. The surprising fact that caught the public imagination was that people did not have any idea of where had they been during those days. Aakrikaluala- one of the victims undergoing psychological tests & under observation of the best physicians of the country could recall only a few things. He recounted in a teeming press conference that a strange blue light had entered his house the day he disappeared. And that some exotic beings wearing shining armour came into his house and then he did not know what happened. There have been several others too who have reported to media of similar occurrences but no one has been forthcoming for a detailed examination either by police or physicians. The whole story was given an eerie twist by a dead body being found near the New Legislative Building a high security area. The dead body with no apparent signs of violence, was of a young police official who had been hale and hearty that very morning. This caused a fear psychosis among the lay masses and police was charged with carelessness and apathy by opposition leaders. A strategy meeting was called by the Prime Minister, which was attended by amongst others the Police Chief, Chief of Strategic Defence, the Media Minister and the majority leader of the opposition party. The charges against police forces were defended vehemently by the Police ChiefAckrabarkala. The first case, the police chief said, was the case of an unemployed youth trying to explain away his absence from home for a week and leveraging the current rumours to prove himself innocent. When asked about the second case he said that inspite of it being a week when the police official Aabrabakra's body was found, they have not been able to ascertain the cause of death as no marks of violence have been seen on his body. But whether he died of consuming poison, an excessive dose of a "psychotropic" drug or something else, they were unable to determine. When asked about UFO sightings, the Police Chief could not say anything.
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On suggestions to control the menace he said that the counter strategy had to work on two planks cultivating a sense of physical security in the masses and an information campaign to counter the rumour mill. But he also admitted that the police force was too small to ensure physical patrolling everywhere. The Prime Minister Allokalabala, after the meeting, was closeted with the Chief of St r a t e g i cDe f enc e Az a k hShabarab. No one knows for sure what would be the outcome. 1. Which of the following is true about Gondwanaland? (1) The "IEGB" has been sent from other planets. (2) Gondwanaland is the most populated country. (3) The region in which Gondwanaland is situated has a queer name. (4) None of the above. With which country, on geographical parameters, out of the following can we compare Gondwanaland? (1) China (2) India (3) Greenland (4) Post-Communism Russia If the government systems the world over be marked: Coy - Communism; Shy Socialism, Die - Democracy; Mie - Monarchy, Dock - Dictatorship; Pie Parliamentarianism; Fly - Federalism and Pry - Presidentialism, then Gondwanaland might follow (1) Mie (2) Fly (3) Pie (4) Pry Why, according to the police chief, did the unemployed youth leverage the rumours? (1) He was a habituated criminal. (2) He was just playing a prank. (3) He was heavily drunk. (4) He wanted to explain his absence from home. People were not very forthcoming with details of their encounters with IEGB as far as Police and physicians are concerned, which indicates most likely that (1) they feared being put into prison for rumour mongering. (2) the police of Gondwanaland were brutal. (3) people had not actually seen anything. (4) doctors were not interested in examining people.
2.
3.
4.
5.
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6.
The dead body found near the legislative assembly gave a strange twist to the case because (1) law and order situation was satisfactory. (2) the Prime Minister enjoyed good support from the masses and opposition. (3) the place was a high security area. (4) people had heard of mysterious deaths but they were only make-believe stuff. From the inability of Police to exactly determine the reason of the police officials death, we can conclude that (1) they need to send histological samples for analysis . (2) police was really dumb. (3) they did not have anything like postmortem known to them. (4) All of the above. In view of the prevailing situation, the fastest step that the police chief could have taken to bring the situation under control was to go for (1) wide spread arrests of rumour mongers. (2) an information campaign to counter the rumours. (3) recruitment of people into police force & then increase patrolling. (4) an appeal to other countries for help. The meaning of the term "psychotropic drug", as used in the passage is most likely to be (1) a banned drug. (2) a drug brought from Somalia. (3) a drug affecting the mind. (4) heroin.
7.
8.
9.
The decision to be made in the strategy meeting was to choose the most effective way of countering the fear psychosis that had gripped the public. With reference to this decision, categorise the following question items as: (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a minor factor in making the decision. (4) a major assumption made while making the decision. (5) an unimportant issue.
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10. The media is the means which has a major hold on public consciousness. 11. People should live with a sense of relative security. 12. Aakrikaluala is lying. 13. Proper information campaign equipping the citizens of Gondwanaland to disbelieve the rumours. 14. The scientists of Gondwanaland are trying to work on the mysteries. 15. The dead body of a police official being found in the high security zone.
Case No. 2
Nikita Cement Corporation, formed in 1998, as a result of a merger between Obura, Kamisiki Cement Corporation and Mikio Cement Co., is now one of the leading Japanese companies in the cement industry. The companys mission is to contribute to social and economic development and the improvement of infrastructure, by continuously providing a stable supply of high quality cement. At the same time Nikita seeks to boldly challenge new business areas in order to achieve dynamic business development. The companys four business domains are: Cement & Ready-mixed Concrete, Construction and Construction materials, Real Estate, and others including Zero Emissions business. Japan has experienced progressive development of its society and infrastructure, through maintaining and expanding distribution arteries such as highways, railways, airports and harbors, etc., and the creation of functional high rise commercial buildings and residential accommodation. The cement industry has played a vital role in this development and will continue to do so in the future, while meeting the requirements of the modern world in terms of intelligent technologies and environmental preservation. Case context: Japan generates 450 million metric tonnes of waste per annum, however the construction of new landfill sites is virtually impossible due to the Not In My Back Yard (NIMBY) syndrome. Previously, the Japanese cement industry has used up to 24 million metric tonnes of industrial waste per year to make mixed and ordinary Portland cement. However urban waste and incinerated ash was not being utilized for cement production. This case documents Nikitas innovation of Eco-Cement to address this increasing problem in Japan through utilization of these urban waste products to make cement. To address the waste problems in Japan and explore the opportunities of using urban waste, Eco-cement was developed by Nikita. As part of a National Project, on behalfof The Ministry of International Trade and Industry (MITI), research into utilizing urban waste began in 1990. The objective of this research, and the project that emerged, was to develop technologies that utilized urban wastes, such as incinerator ash and sewage sludge, to ultimately prolong the life of landfill sites in areas suffering from problems arising out of wastes disposal. A further objective of this research was to design processes
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that removed toxic and harmful elements from the waste products being used for the cement production. For Nikita, the utilization of urban waste would also provide a new input into production and a new product for the company to market. This venture was also aligned with Nikitas mission to contribute to social and economic development in that it could provide one solution to waste disposal problems for areas of Japan. DIRECTIONS: With reference to Nikitas mission, for each of the items select . 1. 2. 3. 4. if the item contradicts or is not consistent with the factual situation or with the mission. if the item very strongly explains the mission. if the item can be deduced from the actual situation. if the item cannot be deduced.
16. Infrastructure development was pivotal in Japanese progress. 17. Waste utilization by Nikita in cement production. 18. Industrial waste is 10.25% of total Japanese waste. 19. Development of eco cement. 20. Japanese are quite environment conscious. 21. Adapting with fast changing world is the need of the hour. 22. Exploring of new business areas by Nikita. 23. The National Project was completely funded by MITI. 24. NIMBY syndrome is anti-environment. 25. Cement Industries have fulfilled demands in terms of intelligent technologies & environmental preservation.
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Case No. 3
Singhania Health Care Limited (SHCL), is considering expanding its In-Patient facilities and it's diagnostic services. For the in-patient facilities three sites are being considered. Site Site A Site B Site C Area (sq.mt.) 10,000 12,000 7,000
Site A being a prime real estate property, is costly. It would cost approximately Rs. 180/sq.mt. But being located in the centre of the city, it is pretty accessible. Site B is cheaper as the location is suburbs of the city. The cost is nearabout Rs. 90/sq.mt. Site C is located towards the suburbs but in an area which is getting populated very fast. In the diagnostic services, SHCL is weighing four options in the form of various diagnostic tests it would be able to perform fast and accurate. The services being considered are Service CT Scan MELISSA Test MRI Colored Poppler Machinery Cost (Rs.) 10,00,000 50,00,000 25,00,000 35,00,000
CT Scan service is offered in the city by a lot of other diagnostic labs too. But the market for it is growing. And since entry barriers in terms of cost of machinery etc. are not very high, a lot of people entering diagnostic facilities start by offering this service. Hence price wars are usually common. MELI SSA test as a service is not offered by anyone in the whole city and no one in the whole state in fact. If this service is offered it would be at least a "state first" for SHCL. MRI based services are offered by two other players in the market, one of them being a government hospital whose service is priced very low but most of the time is not available. Colored Poppler will be a unique service for SHCL in the city again. But not many physicians would go for this diagnostic service as they prefer its black and white counterpart which is cheaper. The CEO of SHCL- Virbhadra Singhania has called a strategy meeting to decide the issues. Michael SarmaanThe Marketing Manager, Dingko Sareeyo Head-Diagnostic Services and Dr. Zakhaakoo SabareenaHead-Physicians Group have been invited to discuss various issues. The Finance Manager- Prabhu Singhania, a relative of the CEO, is a special invitee to the meeting.
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With reference to the decision to be made, categorise the following question items as (1) (2) (3) (4) (5) a major objective in making the above decision. a major factor in making the decision. a minor factor in making the decision. a major assumption made while making the decision. an unimportant issue.
26. Patients prefer a quiet, wholesome environment outside the city. 27. Publicity in Print Media in achieving a "State-First". 28. Generating maximum revenue. 29. Minimising 'Idle Time' of facilities. 30. Government lowering customs duty on the imports of Diagnostic machinery. 31. Ability to expand the facilities in future. 32. Marketing Team's fears that physicians would resist Colored Poppler. 33. The need for Melissa Test growing in days to come. 34. Availability of uninterrupted power supply. 35. Availability of hospital wastes disposal services. 36. Unavailability of already trained operators for Melissa Test. 37. Physicians not knowing the tremendous benefits of Colored Poppler. 38. The total cost of site A, as compared to site B is (1) (3) higher by 62% higher by 69% (2) (4) higher by 67% higher by 71%
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39. If the total cost to fully install and run the Melissa Test diagnostic service is Rs.6000000 and it is expected that the very first year the number of patients would be 10000 and increase thereafter at the rate of 100% of this every year, what should be the service priced per unit to achieve break-even on the full installation costs by the end of three years? (1) (3) Rs. 10 Rs. 1000 (2) (4) Rs. 100 Rs. 500
40. What sort of market should SHCL expect in the field of CT Scan facilities? (1) (2) (3) (4) Monopolistic. Competitive, marked with competitive pricing. Hostile. Easily expandable.
SCORE SHEET
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BJ Test No. 05
Case No. 1
In 1980 Mr. Ravi Agrawal, a chemical engineer, began experimenting in his spare time with a new method for processing fresh mango juice. By 1985, he had perfected the process to such an extent that he was ready to begin production in a small way. His process enabled him to extract 18 percent more juice from mangoes than was typically extracted by a pressure juicer of the type currently used in cafes. His process also removed some of the bitterness which got into the juice from the peelings when mangoes were squeezed without peeling them. Since many of the better quality restaurants preferred to serve fresh juice instead of canned or frozen juice, Mr. Agrawal believed he could find a ready market for his product. Another appeal of his product would be that he could maintain more consistent juice flavour than haphazard restaurant juicing usually produced. Mr. Agrawal patented the process and then started production. Since his capital was limited, he began production in a small building which previously had been a woodworking shop. With the help of his brother, Mr. Agrawal marketed the juice through local restaurants. The juice was distributed in glass jugs, which proved to be rather expensive because of high breakage. The new product was favourably accepted by the public, however, and the business proved to be a success. Mr. Agrawal began to receive larger and more frequent orders from his customers and their business associates. In 1987, he quit his regular job in order to devote full time to his juice business. He soon reached his capacity because of his inability to personally cover a larger area with his pickup truck. Advertising was on a small scale because of limited funds. Faced with the problems of glass jug breakage and limited advertising and distribution, Mr. Agrawal approached a regional food distributor for a solution. Mr. Agrawal was offered a plan whereby the distributor would advertise and distribute the product on the basis of 25 percent of gross sales. The distributor would assist Mr. Agrawal in securing a loan from the local bank to expand production. Before he had an opportunity to contact the bank to borrow money, Mr. Agrawal was introduced to Mr. Shekhar, a plastics engineer, who produced plastic containers. Mr. Agrawal mentioned his own problems in the expansion of his business. Mr. Shekhar wanted to finance expanded juice production with the understanding that plastic containers would be used for marketing the mango juice. He would lend the money interest free, but he was to receive 40 percent of the net profits for the next ten years. Distribution and advertising were to be done through a local broker for 25 percent of gross sales. The principal on Mr. Shekhars invested money was to be repaid by Mr. Agrawal on a basis of 10 percent of his share of the profits. Mr. Shekhar was to retain an interest in the profits of the firm until the loan was repaid, or at least for ten years.
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Current sales were 10,000 gallons of juice a month. If distribution could be expanded, sales could be doubled, given the potential demand. Of the possible total sales of 20,000 gallons a month, about 75 percent would be sold to large restaurants and the remainder to small cafeterias. As soon as the juice were bottled in plastic containers, sales could also be made to household consumers. Mr. Agrawal was very optimistic that sales to the final consumer through retail shops would succeed. Some initial contacts were made with a local franchiser of drive-in dairy shops. The franchiser was sure that he could sell 4,000 gallons a month through his outlets. Mr. Agrawal also calculated his potential profits. His goal was to increase sales while at the same time earning a 10 percent rate of return on his prior capital investment in equipment and other assets. The present value of Mr. Agrawals investment was Rs 2,50,000. Of this sum, machinery and equipment were valued at Rs 1,00,000; real estate was worth Rs 50,000 and his patent and know how were valued at Rs 1,00,000. On the basis of this evaluation, Mr. Agrawal desired a return of Rs 25,000 above salaries and other expenses after the first year of operation. Both the regional distributor and Mr. Shekhar believed that Mr. Agrawals sales could be increased to 15,000 gallons of juice per month by the end of the first year of expanded operations. However, the extent to which production could be expanded to meet demand depended on the availability of plastic containers (which would be supplied at factory cost under Mr. Shekhars proposal), and additional machinery. Increased market coverage would be obtained both under the regional food distributor and Shekhar proposals. The critical deciding factor, as Mr. Agrawal understood, was which plan would maximize his return on investment beyond the minimum figure of 10 percent. The case-study highlights a decision to be taken by Mr. Agrawal regarding business expansion. DIRECTIONS for Q.1 10: With reference to this decision, categorise the following questions as (1) (2) (3) (4) 1. 2. 3. 4. 5. 6. a major objective in making the above decision. a major factor in making the decision. a major assumption made while making the decision. an unimportant issue.
Cost of securing a loan. High breakage rate of glass jugs. Expansion of the business. Continued demand for Agrawals mango juice. Availability of an interest free loan. Possibility of doubling sales through expanded distribution.
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7. 8. 9.
Previous use of Agrawals building as a woodworking shop. Ten percent return on investment. Small scale of current advertising.
10. Value of patent held by Mr. Agrawal.
Case No. 2
Mr. K P Singh, the President of India Machine Company, leaned back in his chair and reflected with well deserved satisfaction on the success of his company which was engaged in the production and distribution of a range of farm machinery. That afternoon at a meeting of distributors from various parts of the country, Mr. Singh had been urged to introduce new models to achieve better customer satisfaction. The President who had an engineering background, recognized the implications of the distributors suggestions. It would require greater investment in Research and Development. Furthermore, the changes in highly automated production line would be very costly indeed. Also having greater variety of models would require stocking of many more spare parts. Depending on the kinds of changes, mechanics also might need to be retrained. Reflecting on the previous staff meetings, the President realized that sales and marketing people always wanted a greater variety of models but never acknowledged the costs involved in changing models. After all, the company had been extremely successful with just a few models and in general, reducing their cost and price was found to be a better proposal. He felt that what the customers really wanted was value. In order to resolve the mental conflict, he asked his Personnel Manager Mr. Kutty to prepare a questionnaire and get a copy filled by each distributor. The final analysis was done by the President himself and he found that individual opinions of most of the distributors agreed with his own views. Result: Decision was made not to develop new models but to reduce the cost and price of existing models. DIRECTIONS: The case presents a factual situation and a result. For each of the items, select options number (1) if the item contradicts or is not consistent with the factual situation, or with the result or with both the factual situation and the result. (2) if the item very strongly explains the result. (3) if the item can be deduced from the actual situation. (4) if the item cannot be deduced.
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11. Distributors were not cost conscious. 12. India Machine Company produced only a limited range of farm machinery. 13. Introduction of new models needed greater investments in Research & Development. 14. In addition to value, the customers also wanted variety. 15. Mr. Singh was satisfied with the success of his company. 16. The behaviour of most of the distributors was different in a group than on the individual level. 17. Better value can be provided to customers by improving the existing models instead of introducing new models. 18. Mr. Singh had an Engineering background. 19. The company had been extremely successful with just a few models. 20. Newer models mean that the manpower training costs would go up. 21. There were uproarious scenes at the Presidents meeting with the distributors. 22. Mr. Kutty refused to analyse the responses to the questions of the questionnaire.
Case No. 3
R K Swamis small toy factory was doing more business than ever before and had a solid backlog of orders that ensured continuous production. Its profits, however, had not kept pace with production. Rising machinery and hardware costs, higher wages, and higher operating expenses all combined to eat into profits. Mr. Swami was concerned about this situation and had thought about raising prices on many of his products. This was not practical at the present, however, because the prices of most items had been increased within the last six months. Among various alternatives, he had considered opening an outlet to retail his own products. Swami Company had been established when R K Swamis father had started a small toy making shop in his garage twenty years before. When R K Swami had come into the business about five years later, the shop had been moved to a warehouse on the outskirts of town. At that time, much of the space was used for storage of materials and finished goods. Through the next ten years more and more of the storage area had been taken over for equipment and work space; therefore an additional storage building had been constructed next to the original building. The payroll had grown to twenty employees, who were supervised by a production manager. Mr. Swami and one bookkeeper did the purchasing, accounting, and sales work.
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The shop, located in a city of 1,00,000 people, had begun on a special-order custom basis, selling mainly to local residents. Through the years a standard range of toys had been developed, which now accounted for 78 percent of sales. Most of the standard range was sold through four wholesalers to retail toy stores in a five-state area. Two outlets in the city, a department store and a large showroom, bought directly from the factory. Although most orders for custom made items came from within the state, a few came from states all over of the country. In examining his sales and profit records for the past two years, Mr. Swami found that while sales had increased steadily, profits showed only a very slight increase over the preceding year. Further study showed that while the sale of custom-made merchandise netted a consistently good profit, standard items, sold on a slimmer margin, lost money in some cases. Rising material costs and more rigid specifications and demands from large retail purchasers had both contributed to the problem. Unfortunately, the number of orders for custom work had to be limited, for top employees were in short supply and much of this work demanded highly skilled toymakers. Mr. Swami believed that profits could be improved if the volume of standard toys could be increased. Discussing the situation with his production manager, Mr. Swami commented, Gupta, what would you think about opening a retail showroom here ? The way I see it, our standard items are popular and almost sell themselves. Theres plenty of room since we added the new building, and fixing up a nice-looking showroom shouldnt be too difficult or expensive. If we cut out the retailers margin and split it between the customer and ourselves, we can cut prices - or hold them steady, anyway - and still make a decent profit. The retail showroom, Swami explained, would not replace existing distribution channels, but rather complement them. The showroom could be located in the factory, thereby saving delivery and rental costs. Another idea that Swami raised was the possibility of increasing the number of retail stores that carried the Companys range. It was not suggested that toy sales be extended geographically beyond the five states now served, but rather that a more intensive effort would be made to increase the number of retail outlets in these states. According to Swami, this could be accomplished by adding more wholesalers, especially in the larger states. Swamis marketing manager, Sharma, agreed that the number of retail outlets should be increased by more intensive coverage of wholesalers or by adding additional wholesalers to the network. Sharma suggested that the company should find a way to increase sales through moderate-sized retailers, rather than expand sales to department stores and large distributors. Sharma explained that although large retailers could order in bulk, the profit margin was lower. What was needed, according to Sharma, was a balance of sales between large and small retailers, with about threefourths of total sales allocated to the smaller or moderate-sized retailer. To support his argument, Sharma supplied the following statistics: a standard set of four soft toys sold to a large department store earned a 25 percent profit to the factory. The same set sold to a small or moderate-sized retailer earned a 40 percent profit. Therefore, as far as Sharma was concerned, sales should be increased to smaller retailers only. Swamis production manager was worried about the production capabilities of the factory. With output reaching capacity, how could the marketing people plan for increased sales without taking into consideration the capacity of the plant? Even if an additional shift was added, the factory could only increase output by another 40
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percent with existing machinery. He felt that the best way to increase sales would be to expand the custom-made merchandise. A special effort should be made to hire more toymakers. Swami could make a survey of the various vocational schools in the area to find young men who would work as apprentices in the factory. Demand was increasing for the sort of custom work that Swami supplied. Moreover, custom work was the most profitable for the company. Swami weighed all the alternatives. He came to the conclusion that increasing sales without improving profitability would be a waste of resources. He would have to determine which alternative would allow his company to grow, while at the same time contributing to profit improvement. The case-study deals with a decision to be made by R K Swami. He had to decide whether to open a retail showroom and how to improve his profitability. DIRECTION for Q.23 35: With reference to this decision, categorise the following questions as (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a minor factor in making the decision. (4) a major assumption made while making the decision. (5) an unimportant issue. 23. Increased material costs incurred by Swamis company. 24. Increased demand for Swamis toys. 25. Storage space needed by Swamis company. 26. Employment of 20 employees in Swamis factory. 27. Opening of a retail showroom. 28. Availability of skilled toymakers. 29. Improving profitability of Swamis company. 30. Number of states in which Swamis toys are sold. 31. Ease of selling Swamis toys in an attached showroom. 32. Addition of more wholesalers .
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33. Declining profit margins. 34. Direct sales to large retailers. 35. Likelihood of recruiting apprentices through local schools . DIRECTIONS for Q.36 & 37: For the following questions, select the best option. 36. Among the problems faced by Swamis business was the fact that A. B. C. employee morale was low. prices were fluctuating. profits had increased only slightly. (1) A only (3) A and B only (2) (4) C only B and C only
37. Swami had decided against a price increase for his goods because A. B. C. competition was too intense. his father was against it. he had a price increase in the past six months. (1) A only (3) A and B only (2) (4) C only B and C only
DIRECTIONS for Q.38 40: In the following questions, there is a short passage followed by a question. Choose the alternative which most logically follows the idea or information given in the passage. 38. Indians eat far fewer chocolates than their counterparts elsewhereper capita consumption is around 160 grams in urban areas as compared to 810 kg in the developed countries. In rural areas it is even lower. The moot issue: Indians perceive chocolates as a luxury that is expensive. Thats exactly what chocolate marketers are trying to change. Chocolate marketers can increase per capita consumption in India by (1) (2) (3) (4) Making chocolates more tasty. Making chocolates in family packs. Lowering the cost of chocolates. A mega marketing campaign.
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39. Whats worrying cyber security experts, however, is that innovations in electronic crime are growing by leaps and bounds. An instance is the recent case of American Enterprises Vs. Calvin Inc. in the US, Calvin had embedded a particular software (Metatag) which ensured that whenever somebody typed the word American on a search engine, the result would lead to Calvins own site. This was not visible on Calvin Inc.s site, but the search enginesand in effect the users were being misled. It can conveniently be inferred that (1) (2) (3) (4) Internet is an effective tool. Calvin was a tough competitor of American enterprises. Electronics and internet are inseparable. Electronic crime is a potential threat in internet.
40. If I look around my company, I see that our highest-ranking executives are, coincidentally or not, also the busiest people in the company. Even more interesting, they get busier year after year. They always have more work than they can seemingly handleand yet it somehow gets done and done right. From the passage, it can be said that (1) (2) (3) (4) Time and tide wait for none. Time management is an art that top executives are well versed in. Executives always tend to give more work load to their juniors. Leadership is all about handling change.
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BJ Test No. 06
DIRECTIONS: Read the given cases carefully and answer the questions following them. The $ 1.7-billion Japanese conglomerate, Shimadzu, is planning a major marketing thrust in India for its medical diagnostic imaging products. With the launch of direct marketing operations in the country, the company will be vying with market leader Wipro-GE and other majors such as Philips and Siemens for a share in the estimated Rs 1,000-crore market. The company started direct operations in India last January. Besides its Chennai headquarters, it has six offices which act as hubs for marketing customer support and training. Medical diagnostic imaging products such as angiography, radiography (x-ray) and MRI (Magnetic Resonance Imaging systems, and CT scanners are hi-tech) products which can be better serviced and maintained by company-trained engineers. To ensure prompt service, Shimadzu maintains an inventory of spares worth about Rs 1 crore. Moreover, an aggressive sales pitch is necessary to market these expensive products. For instance, X-ray systems cost anything from Rs.6 lakh to Rs.1 crore, while CT scanners range between Rs.80 lakh and Rs. 2.5 crore. An angio system can cost between Rs 1.5 crore and Rs 4 crore, while MRI systems are the most expensive products, starting from Rs.2.5 crore and going up to Rs.5 crore. Given the sophistication and high price of the products, Shimadzu's marketing strategy involves a long term approach to getting the mind share of hospital promoters and administrators. "Our newsletter, solutions, does the spadework by providing technology update, breakthroughs and interesting case studies. When our target customers are ready for a purchase, Shimadzu will be on the top of their mind,'' says Sriram regional manager at Shimadzu India. Another method is to participate in conferences for professionals such as radiologists and cardiologists. The 125-year-old Shimadzu is targeting the large semi-urban, large and small town market with its "Ezy-Rad" X-ray systems, described by the company as "a revolutionary product which can be operational in any rural/small town environment". Also, to suit the Indian conditions, the product has been made more robust and tropicalised, besides enabling operation with a single-phase 2 kva power. To suit the small-town environment, it is designed to save space. It can be installed in a day and is easy to operate, besides being relatively less expensive than others. Besides X-ray machines, Shimadzu will focus on angiosystems and MRI systems. Together, Shimadzu hopes to sell about 25-30 units this year. According to estimates, there are at least 5, 000 hospitals and large diagnostic centers in India-many in towns with a population of less than 5 lakh - which have the potential to buy MRI and CT
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scanners (angio systems can be bought only by hospitals with cardiac surgery facilities), but have not yet acquired one. Equally important are the repeat orders. "We intend retaining 100 percent orders from our customers and are aiming at getting at least 25 per cent of the competitor's customers", says Sriram. But it is not going to be an easy task for Shimadzu. "I do not think that any company can ever catch up on its market share, especially one which has been operating in India only intermittently." Says an industry source. Hospitals and major diagnostic centers are also known to be cautious before they take a decision on buying these equipment. Major players like Wipro-GE, Philips and Siemens would have an edge over new players trying to make a mark on the Indian market, say healthcare industry sources. "Technology features, competitive price and the quality of after-sales service are taken into account in choosing the product," says G. Narotham Reddy, General Manager (Materials), Apollo Hospitals. He feels that Shimadzu is yet to capture the mindshare. Result: Despite all these words of caution, Shimadzu India is confident of nearly tripling its turnover to Rs. 200 crore (including some other revenue streams) within three years. DIRECTIONS for Q1 10: The case presents a factual situation and a result. For each of the items, select option number (1) if the item contradicts or is not situation or with the result. consistent with the factual
(2) if the item very strongly explains the result. (3) if the item can be deduced from the actual situation. (4) if the item cannot be deduced. 1. Occupying the mindshare of the potential customers will be top on Shimadzus marketing agenda. Shimadzu had a regular manufacturing presence in the Indian market for the past 2 decades. Shimadzus plans of selling 25-30 units this year are realistic. Aggressive marketing is necessary for costly products. Launch of direct marketing operation in India is surely going to be successful. Wipro, Philips and Sony are the major rivals of Shimadzu in the market. The design of products to suit Indian conditions may give Shimadzu an edge.
2.
3. 4. 5. 6. 7.
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8. 9.
The purpose of newsletter of Shimadzu is to occupy mindshare of people. Company trained Engineers are better off providing customer care.
10. Cost effectiveness of MRI scanners will give a boost to their sales.
Case No. 2
Cleano is the leading producer of household detergents and soaps with a strong presence in all major national territories. Its immediate rival Tycoon is fighting tooth and nail to occupy the prime position in the market by simultaneously launching a massive advertising blitzkrieg and a product upgradation campaign, both supplemented by a field sales input from a dedicated sales force. Cleano is the producer of three major brands viz, Goody, Best and Fluff. Its corresponding rival products are Mask, Whitener, and Boss from the Tycoon stable. The Chairman of Tycoon Mr. T.V.S.L. Ramprasad Sastry, a brilliant technocrat, has chalked out a massive plan to launch his companys products as a highly affordable alternative to Cleanos products. However the affordability for the customer comes with a cost factor for Tycoon. Its Research & Development (R & D) expenditure has spiralled upwards by 128% over the previous year resulting in a severe cash crunch for the remaining parts of the company. The AGM (Annual General Meeting) of Tycoon (2001-2002) proved to be a stormy one with Mr. Sastry on the defensive trying to explain the meagre dividends to the shareholders on the basis of the funds diversion to R & D. However, the shareholders were not pacified despite rosy pictures of the future predicted by Mr. Sastry. The situation was finally brought under control by the President of the Tycoon shareholders union, Mr. Badriprasad Galgotia. The management was, however, sincerely urged to ensure that the cost escalations of nearly Rs 70 crores due to R & D should pay off in the long run, thereby benefitting the small investors. Mr. Sastry also explained to the shareholders that the company does stand to gain from its investment in R & D as the tax provision stood at zero due to depreciation benefits. Cleano, on the other hand, had been seriously thinking about re-engineering the organisation. It hired a firm M/S Frank Worell & Co. to study the organisational hierarchy, systemic drawbacks and inherent potential for the future. The huge consultancy cost which proved to be a big burden on the Cleano coffers was neglected by its Chairman Mr. Venkat Pillai on grounds of the need for introspection in a closely held inward looking organisation. The employees of Cleano were sceptical of the outcome of the consultants report which could lead to retrenchment on a large scale. A delegation of workers led by the Cleano Employees Federation secretary Mr. Gopinath Sharma apprised Mr. Pillai of the workers apprehensions and requested the management to be considerate while seeking a solution. The two companies were engaged in a bitter battle in the market and had to substantially increase their expenditure on advertising and retailers commissions. Shelf space had started coming with a premium now and regular visits of the sales force had become a necessity to avoid the loss of prime shelf space to the rivals. The problem was compounded by the burgeoning local products, sometimes manufactured by unscrupulous producers, bearing similar sounding names like Ruff, Fest, Woody etc.
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Sick and tired of the petty quarrels over the minor issues, the management of the two companies tried to hold a luncheon meeting to clarify matters, explore areas of synergistic interests and strike a deal. However, the proposal soon ran into rough weather owing to Mr. Galgotias vehement opposition based on the assumption that management competitiveness could be eroded. Profit margins of both the companies went on shrinking and mutual agreement was finally an inevitable situation. Cleano managers, encouraged by a favourable assessment by the consultants engaged by them, decided to finally reach an amicable settlement with their counterparts in Tycoon and repeated their request for a mutually agreeable settlement to jack up both the companies bottomlines.
Data Application Questions

11. Which of these is not a problem faced by Cleano? (1) (2) (3) (4) Increased Commission to retailers. A dissatisfied workforce. Huge advertising budgets. Massive cost of consultancy project.
12. The MD of Tycoon is (1) (3) Mr. Badriprasad Galgotia. Mr. T.V.S.L. Ramprasad Sastry. (2) (4) Mr. Venkat Pillai. None of the above.
13. Which of the following factors would not come under the scope of M/s Frank Worell and Cos report? (1) (2) (3) (4) Structure of Cleanos organisation. Inherent shortcomings. Potential for future. Technical upgradation.
14. Which of the following cannot be inferred to be a direct consequence of the intense competition between Tycoon and Cleano? (1) (2) (3) (4) Increased commission to retailers. Spurious brands in the market. Increased R & D expenses of Tycoon. Increased Advertising expenditure.
15. The firm hired by Cleano for its re-engineering exercise is (1) (3) Arthur Anderson. Frank Worell and Company. (2) (4) Frank and Milinda. William Accounting Company.
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16. This passage is basically (1) (3) Descriptive Technical (2) (4) Analytical Contemplative
17. The R & D expenses of Tycoon in the year 2000-2001 were (1) (3) Rs 55 crores Rs 140 crores (2) (4) Rs 70 crores Indeterminate
18. Which of these is not a management problem mentioned in the passage? (1) (2) (3) (4) Workers resentment over fears of retrenchment. Loss of mandays due to workers resentment. Cut-throat competition. Disproportionately large advertising budgets.
19. From the passage, we may conclude that (1) (2) (3) (4) an amicable settlement was reached between the managements. the managements were trying to work out a mutually agreeable solution. The workers had consented to the luncheon meeting. Spurious brands have no effect over a companys profitability.
20. The motto of Mr. Sastrys plan was (1) (2) (3) (4) To create a stronger brand equity. To produce more efficiently. To promote brands synergistically. To reduce the costs of Tycoons products.
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Data Evaluation Questions

DIRECTIONS for Q.21 30: Given below are some items related to the decision mentioned at the end of the above passage. For each item, choose the correct answer as (1) if the item is a MAJOR OBJECTIVE in making the decision. (2) if the item is a MAJOR FACTOR in making the decision. (3) if the item is a MINOR FACTOR in making the decision. (4) if the item is a MAJOR ASSUMPTION in making the decision. (5) if the item is an UNIMPORTANT ISSUE. 21. Favourable assessment by the consultancy firm. 22. Mr. Galgotias vehement opposition. 23. Fees of the consultancy firm. 24. Mr. Sastrys technical qualifications. 25. Shrinking profit margins. 26. Realising greater profits. 27. The feasibility of a mutual agreement. 28. Increasing expenditure on advertising. 29. Noisy scenes at the Tycoon AGM. 30. Spurious products in the market.
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DIRECTIONS for Q.31 37: In the following questions, there is a short passage followed by a question. Choose the alternative which most logically follows the idea or information given in the passage. 31 Whom to lend to, should be a matter of each banks independent judgement, with the Government merely watching overall performance (as a shareholder). Or else, the same old problem of over-centralization will continue to hurt all publicsector banks. The critical judgement of banks comes into play in (1) (2) (3) (4) formulating their revival plan. deciding on whom to lend. countering government interference. living upto the expectation of customers.
32. Any more of this (loans turning dud, with the principal and interest both lost), and the banks might run out of money to pay interest and repay depositors-Which would need the Government to bail them out with large capital infusions. The loans mentioned in the passage are better known as (1) (3) Non Payable Assets. Non Performing Assets. (2) (4) Non Refundable Assets. Non Recoverable Assets.
33. The most significant stimuli in the Indian context is the process of economic liberalisation that started in 1991, but what we are seeing around us is a superficial transition. It is the tired response of people familiar with life and business before 1991. The real change will start soon, but it wont happen simultaneously in all domains. At the heart of this change will be the generation of individuals who were either born, or started schooling after 1991, Generation Next. Generation Next, refers to (1) (2) (3) (4) persons born and bred in post liberalisation era. persons with a global mindset. persons who are innovative. Cant say.
34. Pepsi Foods campaign for Mirinda Apple Flavour is a sure eye-catcher. The advertising is a contemporary look at the legends that smell and taste of apple. Newtons knock on the head and, of course, Eves temptation. Both these stories have the flavour of apple, as does the drink. All we added is the playful, whimsical personality of Mirinda, explains Samir Gangadhar of HTA. It can be inferred that (1) (2) (3) (4) advertising is all about fooling the customers. advertisements, to be effective, should contain enough content in them. Newton was a great scientist. None of the above.
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35. Sensing the severity of the problem, the Reserve Bank of India (RBI) has asked banks to make full use of Debt Recovery Tribunals in case of willful defaulters, and asked them to be prudent while extending loans. RBI is called (1) (3) The bankers bank. The defaulters bank. (2) (4) The lenders bank. The borrowers bank.
36. Today, only the Life Insurance Corporation (LIC) and the Unit Trust of India are allowed to offer pension products. But the plan now is to let private players, including insurance companies and asset management firms, into the sector. Industry experts believe that the move will trigger a boom not only in savings, but also in stockmarkets, besides giving a solid foundation to the nascent insurance industry. Stock markets are likely to be benefitted by the move because (1) (2) (3) (4) the move will ease out regulations. the move will increase cash flow. the move is likely to punish defaulters. the move will make trading more transparent.
37. Today, it is not just running after eyeballs, or subscribers, but setting strategy based on what the fashion is, in order to maximise capital raised. And as the fashion is volatile, so the fortune of the fashionable company. It is tempting to consider the current difficulties faced by the telecom industry as a one-time phenomenon. The analogy of fashion is used here to (1) (2) (3) (4) define the youth, which is mad after fashion. define the fashion shows which are hub of glamour. equate the transient nature of vogue fashion with changing strategies of companies. tell about asthetics.
DIRECTIONS for Q.38 40: In the following questions give the most apt meaning of the given corporate terms. 38. What is a golden share? (1) (2) (3) (4) A share given to an employee when he retires from a company. A share in a company that controls atleast 51% of voting rights. A share on which 10% dividend is declared. None of the above.
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39. What is a blocked currency? (1) (2) (3) (4) Currency which cannot be taken out of a country. Currency which is invested in shares. Currency which is in bank. Currency which is brought illegally in a country.
40. What is speed money? (1) (3) Plastic money. A bribe. (2) (4) ATM. A salary.
SCORE SHEET
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BJ Test No. 07
Case No. 1
It was a simple letter. One from the director of personnel at Citywest Bank (Citywest) asking Nimbus Computer Training Institute (Nimbus) to conduct a six month course on Microsofts Windows software and Windows-based applications for all its staff. But for Darius Mascrenhas, it was more than a routine request; it was a reaffirmation of the banks faith in the quality of Nimbus teaching programmes. For, eight years ago when Mascrenhas and his friend Mohan Menon had set up Nimbus, Citywest had been one of their first clients. And it was reassuring to know that the tack they had taken had paid off. Fresh from B-School, Menon and Mascrenhas had teamed up to start their own computer training institute in Mumbai. One that would be different they decided. The accent would be on PC-usage, with courses specifically tailored to the needs of the corporate world. With the country on the threshold of an information revolution - and almost every company investing heavily in hardware and software - Menon and Mascrenhas were convinced that the future would throw up untold opportunities. Their classmates, most of whom signed up with foreign banks and transnational companies were, however, somewhat sceptical. But then, Menon and Mascrenhas were bucking the trend in more ways than one. The city of Mumbai was already peppered with computer education shops, the leaders being Techno Teaching (Techno) and Alpha Computers (Alpha). Almost without exception, institutes like these took advantage of the lack of awareness about technology and offered curricula based on outdated COBOL and BASIC languages. Nimbus, the duo decided, would focus only on PC-based packages like dBase and Lotus. In keeping with this they took pains to explain to prospective students why PCs were the tools of the future. But they faced an uphill task. Techno and Alpha, which had strong financial backing were the largest advertisers among the computer schools and were regarded as opinion leaders. If they had faith in the future of large systems like mainframes, who would listen to an upstart like Nimbus? The situation was paradoxical, reminisces Mascrenhas. On the one hand, the actual user of technology, the corporate sector, relied predominantly on PCs. On the other the buyer of training, the students, were being sold mainframe languages. However, neither Menon nor Mascrenhas wavered from their original purpose of providing application-specific and solution oriented training that was qualitatively superior to the competition. Despite their visionary zeal they realised that they could not afford to target the mass market since they did not have the resources to advertise or franchise their services widely. So they decided to concentrate on the corporate sector, offering to train staff to better utilise the hardware and software that companies
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had made large investments in. After bagging three blue chip clients they set about their task in a professional manner. Flogging standardised packages was not their style. Instead Menon and Mascrenhas sat with their clients, discussed their operational needs threadbare, and then developed training programmes tailored to each clients specific needs. What also set them further apart from the crowd was their style; batches were restricted to 12 students, each of whom was provided with an individual PC. Thus, custom built solution-oriented and personalised training became the hallmark of Nimbus. In short, Menon and Mascrenhas had all the ingredients of a sure-fire winner. Initially, the partners focussed most of their energy on these three clients who together contributed almost 90% of Nimbuss revenues. But 30 months down the line, Menon and Mascrenhas grew increasingly wary of this over reliance and drew up a plan to leverage their skills. With the general awareness of fourth generation languages like AlDA, C++, and OOP growing rapidly, they felt that time was ripe to exploit their experience in applications and evolve generic courses that would appeal to individuals. By a happy coincidence, a reputed college in South Mumbai, hoping to improve computer awareness among its wards, asked Nimbus to train 80 of its students. That opportunity opened up a whole new horizon for Mascrenhas and Menon. By the end of the fourth year, 40 per cent of their turnover was coming in from individual customers. But their resources were stretched thin. Finding dedicated training staff was difficult, as computer professionals preferred to take up software development rather than teaching. Some of the large institutes though, set up software developmental cells, and lured teachers with the promise of development work. The synergies of such a strategy were enormous. Not only did these large schools attract a good faculty, their software cells provided students with hands on training opportunities in project management. Menon and Mascrenhas consciously avoided this route. We thought it would prove risky in the long run. For one, having a common pool of staff for training and software could be detrimental to the quality of teaching. Two, once their skills in software were developed, professionals would leave teaching for more lucrative software jobs. This had happened in a large number of institutes. At the recruitment stage itself, therefore, we looked for technical competence and dedication to training, says Mascrenhas. As a result, Nimbus faced tremendous problems attracting teaching staff. The partners realised that even matching industry salaries wouldnt really help as they had yet to build a reputation for themselves. Further. Nimbus was still a small set-up, with its revenues barely three per cent of Technos. The larger institutes had branched out to locations throughout Mumbai and even set up shop in the smaller cities. Nimbus on the other hand was still a single-location school. Advertising would have helped but that required money, which Nimbus didnt have. The shortage of funds also prevented the institute from entering the field of platform based training which required large investments in hardware. Nevertheless, Menon and Mascrenhas believed they could carve a niche for themselves by offering PC-based courses which were relevant, versatile, affordable and provided the right foundation for platform based skills. Naturally, this was a period of intense soul-searching for Menon and Mascrenhas. Would Nimbus survive in the long run? That was a question they asked themselves over and over again. Course engineering become Nimbuss USP. Their market research showed that a very small percentage of students who enrolled for the long-duration courses actually went on to make a career in computers. Many of them dropped out because they had been
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poorly advised about the course contents. Further most were already employed and sought computer training to enhance their careers. Based on these findings, Nimbus designed its courses for two different categories of customers: non-computer professionals who wished to familiarise themselves with applications. And those who wanted to become specialised computer professionals and sought advanced courses. As a result of this focused approach, Nimbus built a formidable reputation for itself. Students who compared themselves with their peers from other institutes believed they did get better value for money. Just as important, clients in the corporate world repeatedly endorsed their faith in the teaching methods of Menon and Mascrenhas. Overnight, a number of companies have switched to 386s and 486s, and to Windows as their operating systems. But even now, the PC-level programmes of the well-established institutes continue to be structured around dBase and Lotus, with just 15 hours in a 600 hour course devoted to Windows. Two years from now, when their students graduate, they will find themselves ill-equipped for an environment that will be entirely Windows driven. Research has shown that by the end of 1994, four out of every five PCs that will roll out of assembly lines in the US will use Windows as the operating system. But these institutes do not have the technological sensitivity to incorporate these trends into their curriculum. That will require retraining faculty, fresh investment in hardware platforms, curricula, courseware and training methodologies. It is because we are dedicated to relevant quality training that we are able to adapt to these trends, says Mascrenhas. It is precisely this nimble-footedness that the information technology (infotech) industry, in particular, appreciates. For it must otherwise make do with students from training institutes that it derogatively calls COBOL-shops. Says the CEO of a Bangalore based software company: These institutes have no career counselling and make no serious attempt to train people in tune with the needs of the infotech industry. With the barriers to entry so low, there has been a proliferation of institutes offering PC-level training. Some of them have neither trained faculty nor adequate facilities, while others are unable to sustain the quality of their training. What this has meant to the Software industry is shortage of trained and skilled manpower. Most of these so-called trained students are likely to be outdated by the time they complete their current courses, which are not even geared to the newer PC level programmes. Avoiding obsolescence has been Mascrenhas primary concern. Since technology changes ever so quickly, he reviews his course material, training programmes, and faculty continuously. Yet, eight years after it was set up, Nimbus remains small. The industry meanwhile has grown by an average of 24 per cent a year with the frontrunners registering over 55 per cent growth. Techno, for instance has 115 training centers all over the country and revenues from training alone are close to Rs 50 crore. And Alpha has an equal number of franchisees, with training revenues of Rs 45 crore. By comparison, Nimbus has chugged along at a modest 33 per cent growth rate, with revenues of a paltry Rs 1.2 crore. The key factor responsible for this less-than sterling performance has, perhaps, been the decision of Menon and Mascrenhas to remain single-point operation in order to sustain their quality standards. The moment you set up distant operations you run the risk of diluting quality. The single proposition that sets us apart could be lost. How do we ensure our basic accent on quality training if we have 20 centres? asks Mascrenhas. What are the quality issues so important to Mascrenhas? The first is counselling. Both Mascrenhas and Menon ensure that their students take up courses they are likely to
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find useful in their work spheres. Then the recruitment of its faculty. Nimbus has consciously sought only those people who are dedicated to teaching with no ambitions in software development. Thirdly, providing customised training for corporate clients. Today, Nimbus spends a significant amount of time in building training programmes that are solution-oriented and are not merely impersonal packages. Lastly, batch size. Nimbus does not believe in batch sizes of greater than 12 students, a far cry from the competitions average batch size of 40. So if in a 14 hour day Techno can teach 1,400 students at one centre Nimbus trains only 420. Moreover, Nimbus resources are stretched to breaking point with the institute open from 7 a.m. to 9 p.m. every day. Small batches mean that Nimbus must have a larger staff than the industry average, even though retaining trainers is becoming increasingly difficult. Keeping in view the financial constraints Menon and Mascrenhas face, buying or renting property in a place like Mumbai to set up additional outlets is virtually impossible. That leaves only one other possibility - franchising. A franchisee would contribute the premises and hardware and, in return, would be allowed to use the Nimbus name to set up a training centre. And he would contribute towards the preparation of course material and advertising, and share a percentage of his revenue with Nimbus. However, Mascrenhas fears that franchisees would be tempted to compromise on aspects like the size of batches and counselling in order to maximise profits. He is quick to point out the experience of Nimbus rivals to prove his point. They have not been able to ensure uniform quality. Some centres are seen even by the students to be better than others under the same name. This produces an end-product - students - of varying proficiency and dilutes the brandname. That is exactly our anxiety. It is very easy to find franchisees. With many companies offering voluntary retirement schemes, and the influx of Gulf earnings, there are people with both funds and property. If the Techno pattern of 40 students to a batch is to be followed, you need 400 sq ft of space and Rs 3 lakh for PCs. For these people, the computer centre becomes nothing more than a business venture. This is not what we want. A great deal has gone into setting the standards for quality education at Nimbus, and we are not prepared to make a trade-off. There has got to be a way of achieving growth with quality. That, then, is the Nimbus dilemma. Expectations from their environment - employees, customers and vendors - have outpaced what Mascrenhas and Menon are able to meet. The partners have also started feeling that the returns on their own time and money are grossly inadequate. If anything, being small has made both Mascrenhas and Menon restless. It is not a question of viability since Nimbus does earn an operating profit of 30 per cent; it is the fact that staying power, as Mascrenhas realises, will come only with growth. Mascrenhas and Menons perseverance has taken them from a revenue of Rs. 5 lakh to Rs. 1.2 crore in eight years. Simultaneously, their customer base has swelled from 25 to 1,280. But while it seemed fine to operate out of a single location eight years ago, today, that strategy is hindering Nimbus ability to grow and attract good training staff. Does it stand a chance against say, Techno, with its 115 centres and a student base of 30,000? How, then does Nimbus stop a prospect from walking over to its competition? Even with its reputation of quality, a student in north Mumbai, for instance, is unlikely to travel across the city when he knows there are high-profile institutes next door. Equally, is Nimbus accent on only PC-level training appropriate when the software industry is complaining of a supply gap in trained personnel? In many ways, Nimbus is
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caught in a vicious circle of its own making. Furthermore it has no way of spreading the message of its quality because it simply cannot afford to advertise widely. The only avenue of breaking out of this vicious circle - tying up with a foreign training institute - is also shut because Nimbus just does not have the numbers to attract an overseas partner. The hurdles associated with remaining small do not end there. How does Nimbus tackle its vendors, who find large names like Techno more lucrative? How does Nimbus ensure vendor-loyalty and meaningful relationships with suppliers when its volumes are so small? Further, how can Nimbus in its present form, give its investors better returns? Sure, the private limited company provides Mascrenhas and Menon an operating profit of 30 per cent. But how long will investors want to retain their net worth in an investment that cannot provide them a secondary market? Will becoming a public limited company assure growth with quality? Or can growth be achieved even by remaining closelyheld? It is clear that if Mascrenhas and Menon wish to thrive in the computer education business they will have to find a way out of their current dilemma. On one hand, they are clear about meeting their quality objectives. Indeed, they have no desire to join the milling bandwagon of their competitors who have transformed their training institutes into nothing more than money-making rackets. The question before the pair, therefore, is whether growth can be achieved without compromising on their ideals. For, only growth can ensure that Nimbus wields the influence in the market that is its due. Besides, increase in numbers will boost the morale of its staff and attract better faculty. It will help in the institutes relations with vendors and corporate clients. And assist a tie-up with an international institute. Are these ideals impractical in the current scenario? Are there ways of achieving growth by remaining a single point operation? Or should Mascrenhas and Menon explore the possibility of moving into platform-based training skills or software development? Or simply compromise a little on quality? The case study highlights a decision situation faced by Mascrenhas and Menon regarding the future course of action. DIRECTIONS for Q.1 to Q.16: With regards to this decision situation, classify the following question as (1) (2) (3) (4) 1. 2. 3. 4. 5. 6. a major objective in the decision situation. a major factor in the decision situation. a major assumption made while making the decision. an unimportant issue.
Non-uniform quality of different centres of Nimbuss rivals Small batch sizes at Nimbus Single location nature of Nimbus Avoiding obsolescence in courseware Intensive career counselling at Nimbus Preservation of brand equity of Nimbus
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7. 8. 9.
Increasing difficulty in retaining trainers Possibility that franchisees will sacrifice quality of Nimbus Single-minded missionary zeal to preserve quality and competitive edge of Nimbus
10. Greater weightage to Windows in Nimbuss software 11. Voluntary retirement schemes of several companies and influx of gulf earnings 12. Viability factor of Nimbuss existence 13. Wielding influence in the market 14. Infotech industry derogatively calling several institutes as Cobol-shops 15. The Citywest request to Nimbus for a training programme
Case No. 2
The major shareholder of Makhijas Garage Ltd is Meena Makhija. It was her capital and her brother Harminders mechanical knowledge which enabled them to feel confident enough to buy the garage in 1956 as a going concern. Although conscious of the potential loss of goodwill, they nonetheless changed the trading name of the business. However, it was decided to retain the corporate identity. Harminders interest in the business is threefold. First, he is a minority shareholder, see Table 1. Second, he owns the site which he rents to the company for a modest annual rent. Third, his salary from the business is his major source of income. A high pressure car wash, thought Harminder, would be an ideal use for the unused part of the site. The area is just off the main forecourt and visible from both the main road and the shop. Further, not only is it large enough but it already has a slight slope which would aid drainage and so, according to a local builder, keep the capital cost of the installation down. The builder estimates it would take three weeks for initial ground work and a further three weeks for laying the hard standing. The lead time for the machinery is at least eight weeks, see Table 2 and Figure 1. The machinery would be installed by a contractor recommended by the manufacturer. Once the site is ready all that would be required would be some final touches, which shouldnt take more than about a week, and the garage would have another facility to attract customers. With the nearest car wash five miles away Harminder is convinced his customers would use it, especially in winter. The less than positive response from the local planning authorities was expected; they automatically say no to every planning application on first submission. However, the position of his bank is less clear. Harminder thought that, because the business has been a loyal customer for over 35 years, there wouldnt be a problem in getting a three year loan of Rs.25,000. When the new manager in his local branch had said something about having to refer it to his regional business adviser, Harminder had taken this to be nothing other than one of their internal formalities. Consequently when Harminder read the banks response he was dumbfounded, annoyed and confused by their attitude. The letter said they would be prepared to lend the capital to Harminder as a personal loan but not to lend to the
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business. This would allow Harminder to lend the business the money further as Directors loan. Situated at the junction of two busy A roads on the edge of a modern township the business has grown in size such that in addition to fuel, it now sells and maintains cars. Twelve years ago Makhijas became a franchised retail outlet for an imported brand of car by becoming an agent. More recently it has started to sell second hand cars, most of which are sourced through the trade, although some are taken as trade-in against newer vehicles. Since the closure of the township post office, the forecourt shop has become increasingly important to the local community. The business currently employs eleven full-time staff. There are three full-time mechanics who work under the supervision of Dilshaad Khan, the workshop foreman. Three months ago the business hired Dilshaads son, Afzal, as an apprentice. Afzal goes to a local college one day each week as part of his studies for a vocational qualification in vehicle maintenance. The sales department consists of Maninder, Meenas son, and a full-time employee with the title Sales Executive. Meena administers the business, is the Accountant and Company Secretary. Harminders formal position is Managing Director whilst his dayto-day role is that of a General Manager. He takes specific responsibility for the forecourt, and supervises the forecourt sales staff. The garage forecourt is open from 6.00 until 22.00, 365 days per year. Makhijas now operates two franchises. The fuel franchise is held with a major supplier which has one of the largest market shares within the retail fuel sale market (with the exception of owning all of the retail outlets it sells through, the supplier is vertically integrated). As a franchisee, Makhijas does not have complete operational control. Indeed, the level of prescription from both franchisers is such that Meena and Harminder feel there is little they can do to boost the profits of the business. Meena has recently drawn up a profit projection for the coming year which shows a fall in the companys profits, see Table 3 . Makhijas is encouraged by the fuel supplier to set the price of petrol at a level which reflects that at other key marker sites in the locality. Consequently, gross margins on fuel are typically lower than 1p per litre. Similarly, a complicated dealer commission scheme operated by the car supplier ensures that it is financially inadvisable to deviate from the manufacturers recommendations. Further, all planned routine maintenance on cars is subject to menu prices set by the manufacturer. To ensure compliance, the manufacturer has the right under the franchisee agreement to audit the business accounts. This right was last exercised eighteen months ago. Although neither franchisers has yet to prescribe the appearance of the garage, Harminder is aware that both would like the business to be more in line with the corporate identity projected by a major motoring brand proposition . Whilst the signage and pumps on the forecourt make it instantly recognisable as a branded outlet, the shop still retains an air of individuality. The forecourt shop is a worthwhile source of income for Makhijas. Typical weekly turnover is Rs. 2000 from goods sold with a 15% mark up. The layout of the shop is designed to maximise the possibility of impulse purchases. The goods sold include a few motoring items, confectionery, news and magazines through to basic grocery provisions. Harminder decided to extend this range after one of the shop staff suggested selling fresh vegetables. Early indications are that many customers appreciate the ability to put these heavy items straight into their cars rather than having to carry them around a town. However, Harminder still worries about the reliability of the wholesaler and his own ability to forecast customer demand. Deciding
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stock levels for fruit and vegetables is something he simply doesnt have expertise in. All of his experience is in dealing with fuel and vehicle spares, neither of which is perishable. Ordering fuel is straightforward. The garage has four fuel storage tanks, see Table 4. Harminder merely has to telephone the depot and place an order. Delivery is guaranteed within 72 hours but it is usually the next day. Historically, unleaded outsells diesel by a ratio of 2:1. Last year weekly sales for all fuels averaged 55,000 litres. There is little seasonality in the fuel market; additional sales to passing summer drivers compensate for a fall off in local sales during holiday periods. Harminder believes that his sales volumes are about 20% higher because he sells a major brand. There are two full time forecourt sales staff, one working 06.00 to 14.00 and the other 14.00 to 22.00. Both work a forty hour week, forty eight weeks a year. The staffs ninety minutes of rest-breaks per day are covered by either Harminder or Meena, as their other commitments allow. Harminder values the understanding and flexibility of his permanent staff. Indeed, he views his staff more as friends than employees and believes the business has a family culture. Staffing for weekends and holidays is covered by casual staff. Currently the business has eight such staff. These casual staff work flexible hours in agreement with Meena and Harminder. Finding and retaining suitable casuals has long been difficult for a number of reasons (see Table 5) . First, the affluence in the township is such that there are few locals who feel the need to work on a casual basis. Second, the job is not one that has many prospects or intrinsic challenges. Third, there is the perceived security risk of working alone in the evenings. Fortunately Makhijas has yet to suffer a robbery, although a police officer once suggested to Meena that it was probably only a matter of time. His view was that the security cameras and other precautions insisted on by the insurance company offer little deterrence. In an ideal situation, Harminder would like to employ only full time staff but recognises this would have some disadvantages. Harminder looked again at his site for the car wash. Perhaps, given all of the problems inherent in running the business, investing in a car wash is not such a good idea. Not knowing how long it will take to get it up and running is just one of many issues to consider before embarking on yet more capital expenditure. Most sensible people of his and his sisters age were thinking about retiring. Giving themselves even more work, and worries, for so little reward hardly seems worthwhile. Maybe, thought Harminder, he should talk the matter through with Meena.
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Table 1 Makhijas Garage Ltd Unaudited accounts for the financial year 2002
P & L Account year ending 31/03/2002

Earnings Sales Cost of sales Gross Profit Other income
Bonus & Commissions
2,964,559 2,699,359 265,200 15,090 280,290
Operating profit
Less Expenses Employment costs Rates Rent Utilities Office Advertising & promotions Insurance & security Auditors & legal fees Miscellaneous Depreciation Bank interest Total expenses Net profit
159,838 6,591 6,000 7,003 6,895 17,481 8,455 4,959 1,997 6,896 3,885 230,000 50,290
Balance sheet as on 31/03/2002

Fixed Assets Equipment Fixture & fittings Current assets Stock Debtors Cash Creditors falling due within one year 85,551 18,754 104,305 137,750 85,722 9,874 233,346 85,655 Capital and reserves Share capital Reserves Creditors falling due after one year Directors loan Capital employed 1,000 210,996 40,000 251,996
Net Assets
251,996
Note. 1 Net of NI and other costs 2 Net of 25% reducing balance depreciation 3 Fuel suppliers 4 Other creditors 5 1,000 fully paid up Re.1 shares Mrs. Meena Makhija 850 Mr. Harminder Makhija 100 Mr. Naankoo Makhija 50
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Table 2 Car wash project Activity details and estimated durations A B C D E F G h Ground work, drainage, gradient Order and await delivery of machinery Book newspaper advertising of car wash Lay hard standing Install machinery Snagging and safety checks Order and await delivery of signage Install signage Car wash project - Activity relationships 3 weeks 8-10 weeks 1 week 3 weeks 1-2 weeks 1-2 weeks 6 weeks 1-2 weeks
Table 3 2001/2002 Budget By profit centre

Fuel Revenue Direct costs Indrect costs Profit/loss Rs. 2252000 Rs. 2193000 Rs. 21364 Rs.37636 Shop Rs. 115000 Rs. 92000 Rs. 42727 Rs. 19727 Car Sales Rs. 650000 Rs. 474000 Rs. 64091 Rs. 11909 Workshops Rs. 195000 Rs. 85000 Rs. 106818 Rs. 3182 Total Rs. 3,112,000 Rs. 2,844,000 Rs. 235000 Rs.33,000
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Table 4 Fuel tank and sales

Tank 1 2 3 4 Fuel unleaded diesel LRP super unleaded Capacity, Litres 30,000 14,500 13,500 7,500 Weekly Sales 55.00% 27.50% 7.50% 10.00%
Table 5 Severances
Date 06/01/02 31/03/02 01/04/02 12/04/02 15/05/02
Name Tajw inder Singh Banthoo Mohammed Jeetu Mohan Gupte Raakhoo Singh
Department forecourt forecourt forecourt workshop forecourt
Status casual FT casual FT casual
Reason Higher w ages elsewhere retirement university Higher w ages elsewhere pregnancy
With reference to the decision to be made, categorise the following question items as (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a minor factor in making the decision. (4) a major assumption made while taking the decision. (5) an unimportant issue. 16. A preliminary market survey indicating that residents of the township would appreciate a car wash facility. 17. Improving the profitability of Makhijas. 18. The two franchisers would further reduce the operational autonomy of the business. 19. Inability of Harminder to find more full time workers.
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20. Bank's refusal to grant the loan to Makhijas Garage Ltd. 21. Home delivery of fresh fruits and vegetables begun by a SupermarketSafal in the township. 22. A global rise in the price of Petro-products. 23. An offer to Makhijas from Automarts for a franchise in second hand cars. 24. Diversifying into higher margin businesses. 25. Car-wash Equipment Manufacturer's offer to reduce the total time to get the whole project running by half a week. 26. What is maximum total time required from ordering the machinery to getting it running? (1) 10 weeks (2) 14 weeks (3) 23 weeks (4) 29 weeks
27. Makhija's maximum fuel sales are in which category? (Absolute quantity) (1) (3) Unleaded LRP (2) (4) Diesel Super unleaded
28. The highest profit shown by any profit centre of Makhija's as a percentage of total profit is (1) 10% (2) 60% (3) 114% (4) 150%
29. The maximum number of severances are seen from which department in Makhijas? (1) Fuel (2) Workshop (3) Forecourt (4) Car sales.
30. Out of a total profit of Rs. 10,000 at the year end, if nothing is retained, the share of the dividend that Naankoo Makhija would receive would be (1) Rs. 5000 (2) Rs. 50 (3) Rs. 1500 (4) Rs. 500.
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DIRECTIONS for Q.31 40: There is a short passage followed by a question. Choose the alternative which most logically follows the idea or information given in the passage. 31. A famous singer recently won a law suit against an advertising firm for using another singer in a commercial to evoke the famous singers well-known rendition of a certain song. As a result of the law suit, advertising firms will stop using imitators in commercials. Therefore, advertising costs will rise, since famous singers services cost more than those of their imitators. The conclusion above is based on which of the following assumptions? (1) (2) (3) (4) The original versions of some well-known songs are unavailable for use in commercials? Most people are unable to distinguish a famous singers rendition of a song from a good imitators rendition of the same song. The advertising industry will use well-known renditions of songs in commercials. Advertising firms will continue to use imitators to mimic the physical mannerisms of famous singers.
32. Kirit Industries manufactures and sells the same gauges as Mohit Industries. Employee wages account for 40% of the cost of manufacturing gauges at both Kirit and Mohit Industries. Kirit Industries is seeking a competitive advantage over Mohit Industries. Therefore, to promote this end, Kirit Industries should lower employees wages. Which of the following, if true, would most weaken the argument above? (1) (2) (3) (4) Kirit Industries pays its employees on average, ten percent more than does Mohit Industries. Lowering wages would reduce the quality of work put in by the employees and this reduced quality would lead to lowered sales. Mohit Industries has taken away 20% of the business of Kirit Industries over the last year. Gauge manufacturers cannot receive volume discounts on raw materials, since they make a small number of precision instruments.
33. The recent decline in the value of the rupee was triggered by a prediction of slower economic growth in the coming year. But that prediction would not have adversely affected the rupee had it not been for the governments huge budget deficit, which must therefore be decreased to prevent future currency declines. Which of the following, if true, would most seriously weaken the conclusion about how to prevent future currency declines? (1) (2) (3) (4) The value of the rupee declined several times in the year prior to the recent prediction of slower economic growth. The budget deficit has not caused a slowdown in economic growth. Before there was a large budget deficit, predictions of slower economic growth frequently caused declines in the rupees value. The government has made little attempt to reduce the budget deficit.
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34. The price the government pays for standard weapons purchased from military contractor is determined by a pricing method called, historical costing. Historical costing allows contractors to protect their profits by adding a percentage increase, based on the current rate of inflation, to the previous years contractual price. Which of the following statements, if true, is the best basis for a criticism of historical costing as an economically sound pricing method for military contracts? (1) (2) (3) (4) The government might continue to pay for past inefficient use of funds. The rate of inflation has varied considerably over the past twenty years. Many taxpayers question the amount of money the government spends on military contracts. The contractual price will be greatly affected by the cost of materials used for the products.
35. People buy prestige when they buy a premium product. They want to be associated with something special. Mass-marketing techniques and price-reduction strategies should not be used because ...... Which of the following best completes the passage below? (1) (2) (3) (4) expansion of the market niche to include a broader spectrum of consumers will increase profits. affluent purchasers currently represent a shrinking portion of the population of all purchasers. continued sales depend directly on the maintenance of an area of exclusivity. purchasers of premium products are concerned with the quality as well as with the price of the products.
36. When limitations were in effect on nuclear arms testing, people tended to save more of their money but when nuclear arms testing increased, people tended to spend more of their money. The perceived threat of nuclear catastrophe, therefore, decreases the willingness of people to postpone consumption for the sake of saving money. The argument above assumes that (1) (2) (3) (4) the perceived threat of nuclear catastrophe has increased over the years. there are more consumer goods available when nuclear arms testing increases. most people supported the development of nuclear arms. peoples perception of the threat of nuclear catastrophe depends on the amount of nuclear arms testing being done.
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37. In many corporations, employees are being replaced by automated equipment in order to save money. However, many workers who lose their jobs to automation will need government assistance to survive, and the same corporations that are laying people off will eventually pay for that assistance through increased taxes and unemployment insurance payments. Which of the following, if true, most strengthens the authors argument? (1) (2) (3) (4) The initial investment in machinery for automation is often greater than the short-term savings in labour costs. Many corporations that have failed to automate have seen their profits decline. Taxes and unemployment insurance are paid also by corporations that are not automating. Many workers who have already lost their jobs to automations have been unable to find new jobs.
38. Correctly measuring the productivity of service workers is complex. Consider, for example, postal workers. They are said to be productive if more letters are delivered per postal workers. But is this really true? What, if more letters are lost or delayed per worker at the same time that more are delivered? The objection implied above to the productivity measure described is based on doubts about the truth of which of the following statements? (1) (2) (3) (4) The number of letters delivered is relevant measuring the productivity of postal workers. Productivity should be absorbed to categories of workers, not to individuals. The quality of services rendered can appropriately be ignored in computing productivity. Postal workers are representative of service workers in general.
39. The fewer restrictions there are on the advertising of legal services, the more lawyers there are who advertise their services and the lawyers who advertise specific service usually charge less for that service than lawyers who do not advertise. Therefore, if the state removes any of its current restrictions, such as the one against advertisements that do not specify fee arrangements, overall consumer legal costs will be lower than if the state retains its current restrictions. Which of the following if true, would most seriously weaken the argument concerning overall consumer legal costs? (1) (2) (3) (4) Lawyers who do not advertise generally provide legal services of the same quality as those provided by lawyers who do not advertise. Most lawyers who advertise specific services do not lower their fees for those services when they begin to advertise. The state is unlikely to remove all of the restrictions that apply solely to the advertising of legal services. The state has recently removed some other restrictions that had limited the advertising of legal services.
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40. Even though most universities retain their royalties from faculty members inventions, the faculty members retain the royalties from books and articles they write. Therefore, faculty members should retain the royalties from the educational computer software they develop. The conclusion above would be more reasonably drawn if which of the following were inserted into the argument as an additional premise? (1) (2) (3) (4) In terms of the criteria used to award royalties, educational software programs are more nearly comparable to books and articles than to inventions. Inventions bring more prestige to universities than do books and articles. Faculty members are more likely to produce educational software programs than inventions. Royalties from inventions are higher than royalties from educational software programs.
SCORE SHEET
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BJ Test No. 08
Case No. 1
India Electricals Ltd. manufactured a range of major electrical appliances which were distributed through sixty wholesalers, many of which were company owned. Retailers carried competitive lines, but wholesalers did not; portable appliances moved to the market through non-exclusive distributors. The company depended on wholesalers to provide service either directly or through supervision of retailers service departments. When the warranty was involved, the manufacturer supplied the parts and the wholesaler the labour. Retailers who performed the service function were given a larger discount than those who returned the goods to the wholesaler to fulfill the guarantee. In 1980, commerce officials began questioning the adequacy of the service thus rendered either under the terms of the warranty or independently. Typical retailers carried several brands, and in general, did not have competent service personnel. The result was that the blame for the defect was passed back to the manufacturer. This, said the sales manager, was a major consideration. Others believed that the reduction of the service costs would follow from centralizing the entire operation in the hands of a relatively few factory service branches or with carefully trained service personnel employed by a relatively few widely distributed wholesalers. Costs would thus be reduced, and, at the same time, the quality of service rendered would be enhanced, it was claimed. The product service manager argued that more money should be spent on training retail sales service personnel. Retailers like to render service, he claimed, since it helps to bring traffic into their stores and thus is profitable. A third possibility explored was the promotion of good service by concerns who service but do not sell appliances. During the conference, the rise of the discount house was discussed. It was thought to be a phenomenon partly based on the realization that good independent service can be secured in most markets and for most appliances. There may be an exception in the case of TV sets, it was admitted, since it is common to find great resentment to quality of service and delay in meeting calls. The subsequent discussion raised questions as to the validity of the policy of requiring the retailer to give free service time under the terms of the guarantee. Often owners expected to receive this service free, even though they had bought the appliance elsewhere. Some company officials believed that the company should pay dealers for
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their time costs when they enabled the company to make good on its guarantee. One executive pointed out that at least one major automobile manufacturer now paid its dealers for making repairs under the warranty. About this time, the sales manager read about a consumer survey that found the average owner gave little thought to service availability when buying an appliance, except perhaps in the case of TV sets. But, when trouble arose, the owner expected the maker to stand behind his product and not fall back on any excuse as to costs or time involved, limitations which are found in the normal warranty. India Electricals operations manager was given the responsibility of setting up a task force which would study each of the alternatives discussed during the conference. The alternatives were to be examined with regard to customer service and cost. The task force was asked to make its recommendations directly to the service manager. Two of the alternative methods for increasing service were almost immediately discarded as impractical. It was found that retail sales personnel would not have adequate time to devote to servicing appliances. Investing capital in concerns which service but do not sell might increase the level of service, but India Electricals would have little, if any, control over their operation. These concerns were independently owned and had no more allegiance to India Electricals than they did to any number of manufacturers whose appliances they serviced. Some concerns were highly reliable, but others had a record of spotty service. Weighed against other available alternatives, these options had few benefits to India Electricals. It was the conclusion of the operations group that a choice had to be made among three options: (1) factory service branches, (2) wholesaler service departments, and (3) a combination of both factory and wholesaler service. The factory service alternative had a number of advantages to India Electricals. Because India Electricals would provide the service at its own locations with company personnel, it could closely supervise the quality of the work done. Factory supervision of service was more difficult whenever the work was done by independent dealers. Moreover, under the factory system, it could ensure that service personnel undergo the most rigorous initial and refresher training programs. Another advantage of centralized factory service was that parts inventories would be minimized by storage in only a few service locations. Finally, under this system, India Electricals would determine the price of service, thereby ensuring that consumers would not be overcharged. The major disadvantage of the centralized factory service was that India Electricals would have to invest in service locations, provide parts inventories, and train personnel. Because of the size of this investment, few locations could be established. Compared to factory service, wholesaler-operated locations would be more difficult to supervise. As a result, the level of service was bound to vary from location to location. Even though the consumer survey indicated that service was not an important consideration in the pre-purchase decision as to whether to buy an appliance, poor service experienced by a customer might lower the chance that an India Electricals appliance would be bought again. Wholesaler service would require less investment for India Electricals. Although India Electricals would have to take some of the responsibility for training wholesaler personnel, it would not have to invest in service locations nor in inventory parts. Initial investment and operating costs would not limit the number of service centres as it would in the case of factory service. Many of the wholesalers would be eager to offer the service as an added customer benefit. India Electricals investment would be
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even smaller if service facilities were maintained by independent, non-factory-owned wholesalers. A final alternative was a combination of both factory service centres and wholesaleroperated service departments. Under this option, wholesalers would be encouraged to offer service wherever possible, while India Electricals would maintain centralized service centres in areas where wholesaler service was inadequate or spotty. The decision to be made by the executives of the India Electricals Corporation was whether to maintain their present service operations, and if not, what alternative to choose in view of the implications of service operations for customers. DIRECTIONS for Q.1 14: With reference to this decision, categorise the following questions as (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a minor factor in making the decision. (4) a major assumption made while making the decision. (5) an unimportant issue. 1. 2. 3. 4. 5. 6. 7. 8. 9. Training of retail sales personnel. The rise of the discount house. Lack of competent service personnel at most typical retailers. Technical level of service demanded by the consumers. Centralization of the service operation. Distribution of India Electricals products through 60 wholesalers. Increasing the level of service. Consumer belief that manufacturers are responsible for product defects. Investment required in service centres under each plan.
10. Consumer pre-purchase decisions. 11. Portable appliances sold by non-exclusive distributors.
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12. Cost of part inventories . 13. Increase in store traffic due to service calls. 14. Pricing of service. DIRECTIONS for Q.15 20: For the following questions, select the best option. 15. Under India Electricals warranty, which agency repaired defective appliances? A. B. C. Wholesalers Retailer Manufacturer (1) A only (3) A and B only (2) (4) C only B and C only
16. Which of the following reasons were given by executives of India Electricals for reconsidering their service system? A. B. C. Retailers did not have competent sales personnel. India Electricals service system was revised annually. The customers were not utilizing the service. (1) A only (3) A and B only (2) (4) C only B and C only
17. Some executives believed that if service centres were centralized A. B. C. quality of service would be improved. service costs would decrease. fewer call-backs would occur. (1) A only (3) A and B only (2) (4) C only B and C only
18. According to the passage, buyers of appliances at the time of purchase regarded service availability as an A. C. important factor. unimportant issue. (1) A only (3) A and B only (2) (4) C only B and C only B. minor factor.
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19. As per the passage, retailers liked to service appliances because it A. B. C. brought traffic to the store. was profitable. kept them busy. (1) A only (3) A and B only (2) (4) C only B and C only
20. Increased purchases of appliances through discount stores would mean that A. B. C. retailer service availability was not a strong motive in the buying decision. discount stores must increase their service availability. India Electricals sales would decline. (1) A only (3) A and B only (2) (4) C only B and C only
Case No. 2
The annual sales conference of Swan International Ltd in Delhi threatened to end in uproar. The computer hardware manufacturers 28 salesmen had received sales manager Pratap Rudras proposal to re-assign them to new territories with angry condemnation. Explaining the reasons behind the drastic measures, Rudra had reminded the salesmen that the company was suffering from declining sales and had a serious cash flow problem. This was mainly due to slow payments by customers. Accounts receivable were increasing at an alarming rate, he had told them. Under Rudras plan, the companys top salesmen were to be switched from the areas with high sales to areas that currently yielded low sales. He had explained that this would mean that the more experienced salesmen could concentrate on building up sales in the less productive regions. The less experienced salesmen could easily handle the well-developed territories. Some of the firms leading salesmen immediately started to object. I have spent years building up my territory, one of them protested. I do not see why I should have to start all over again in a new region. Rudra pointed out that he felt that the firms best salesmen were being wasted in these well-developed sales regions. You are simply going to well-established customers and taking orders, he argued. An experienced salesman contested this view, observing that he had greatly increased sales in his territory the previous year by persuading existing customers to expand the amount of their orders in business stationery. This supported his view, retorted Rudra, that the salesmen in the well-established territories were becoming stale, and were failing to uncover new customers. This is only natural, he added. When I was promoted to sales manager, I was amazed at how successful my successor was in getting new orders in my old territory. The company badly needs your experience to develop the weaker regions.
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Another experienced salesman asked whether the new plan would mean that salesmen would get an extra bonus or higher commission rates for establishing new accounts. Rudra began to explain why he thought this was impractical, when he was interrupted by one of the younger salesmen who had been sitting at the back of the room quietly fuming. He told Rudra that he felt completely demotivated by the proposal to remove them from the undeveloped territories. Rudra tried to reassure the young salesman that the company did not regard them as failures. The changes were being made simply because the company was having difficulties, and needed to boost sales quickly, he pointed out. Rudra swallowed hard before announcing another new policy he knew was likely to upset the gathered salesmen. The management board has also decided that in future sales commissions will be paid quarterly and only on those orders for which payments have been received from customers, he announced nervously. As from today, it will be your responsibility to raise the subject of slow payments with customers. Moreover, no new orders will be accepted from customers until all overdue payments are received. This was too much for the salesmen to take and the meeting erupted into a noisy uproar. Why shouldnt we be paid for orders we have succeeded in getting? demanded one salesman furiously. It is not our job to collect debts, protested another. This contravenes our employment contract, shouted yet another. The salesmen were all talking agitatedly at once when Rudra decided to close the proceedings for that day. He rushed to a nearby hotel where group managing director P K Sengupta was staying overnight. He was due to address the conference the following morning. Our proposals have met with even more hostility than we expected, Rudra told Sengupta, relating how the meeting had broken up in disorder. Im afraid you will have a hard time tomorrow convincing them that the proposals are in everybodys interest. But I dont think we can dodge the issue now. We have to tackle it while we have them all together. Sengupta nodded gravely. His first inclination was to proceed with the proposals whether or not the salesmen approved. On the other hand, he reflected, salesmen are the key to a companys success. It might be unwise to impose a new system on them without their consent. Sengupta convinced Rudra that his plan, presented during the day at the sales meeting, could not be implemented because of the unequivocal opposition of the salesmen. A compromise plan had to be worked out. Rudra and Sengupta worked long into the night putting together a plan which they believed would be acceptable to most of the salesmen and in harmony with the companys objectives. Rudra suggested assigning quotas to salesmen in existing territories rather than shifting successful salesmen from high-sales territories. By assigning quotas, we can measure individual performance and motivate salesmen towards a predetermined level of achievement. Annual quotas based on expected sales also help in planning production, inventory, and working capital needs. Shifting salesmen is easier under a quota system because quotas can be easily adjusted to reflect the areas potential. If a low-yielding territory has low sales potential, the quota would be relatively lower than in a highyielding, high-potential territory.
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Sengupta agreed that a quota system might be the solution to their sales problem. However, quotas had some disadvantages. Companies sometimes set lower quotas for less able salesmen, but this can be demoralizing. Better salesmen will feel that they are being discriminated against. They will not give their best effort under such a plan. Rudra insisted that a quota system would work. We need to find a plan which will motivate our best as well as our younger, less experienced salesmen. Sengupta summarized the available options. The first option was a straight commission plan. No matter how much sales a salesman produced over his quota, he would earn the same commission rate. A second possibility was a combination of salary and commissions. Salesmen drawing even nominal salaries tend to think as company men and they have less reason to resist sales plan changes that are justified in terms of goals. Sengupta further pointed out that special incentives could be offered under such a plan, such as a new account bonus or high commission rates for sales over 100% of quota. By offering such incentives, Sengupta added, salesmen in less productive regions would be motivated to spend more time in building new accounts. Rudra agreed that both options suggested by Sengupta might be accepted by the salesmen. But, he asked, are these options better for the company than the ones I proposed today? The case-study has highlighted a decision taken by Rudra to reassign the salesmen and to change the companys compensation policy. DIRECTIONS for Q.21 35: With reference to this decision, categorise the following question as (1) a major objective in making the above decision. (2) a major factor in making the decision. (3) a major assumption made while making the decision. (4) an unimportant issue. 21. Swan International Ltds declining sales. 22. Swans accounts receivable problem . 23. Swans Delhi location . 24. Improved cash flow. 25. Senguptas optimism that the sales force would agree to the new plan. 26. Development of new customers . 27. Laying off younger salesmen .
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28. Ability of top salesmen to succeed in any territory . 29. Assignments of quotas to salesmen. 30. Flexibility in setting quotas to high or low levels. 31. Measurement of salesmens individual performances. 32. Likelihood that salesmen will accept Senguptas options. 33. Disadvantages of sales quotas . 34. Rudras experience in dealing with salesmen. 35. Number of salesmen working for Swan. DIRECTIONS for Q.36 40: There is a short passage followed by a question. Choose the alternative which most logically follows the idea or information given in the passage. 36. Recently a court ruled that current law allows companies to reject a job applicant if working in the job would entail a 90% chance that the applicant would suffer a heart attack. The presiding judge justified the ruling, saying that it protected both employees and employers. The use of this court ruling as part of the law would be ineffective in regulating employment practices if which of the following were to be true (1) (2) The best interests of employes often conflict with the interests of employees. No legally accepted methods exist for calculating the risk of a job applicant having a heart attack as a result of being employed in any particular occupation. Employees who have a 90% chance of suffering a heart attack may be unaware that their risk is so great. Some jobs might involve health risks other than the risk of heart attack.
(3) (4)
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37. Since the deregulation of airlines, delays at the nations increasingly busy airports have increased by 25%. To combat this problem, more of the take off and landing slots at the busiest airports must be allocated to commercial airlines. Which of the following, if true, casts the most doubt on the effectiveness of the proposed solution? (1) (2) (3) (4) Since deregulation, the average length of delay at the nations busiest airports has doubled. Over 60% of the takeoff and landing slots are reserved for commercial airlines. Since the above deregulation came to be affected, there is an increase of 25% in the number of airplanes in operation. The major causes of delays at the nations busiest airports are bad weather and overtaxed air traffic control equipment.
38. Property taxes are typically set at a flat rate per Rs. 1000/- of officially assessed value. Reassessments should be frequent so that distortions, arising when property values change at differential rates, can be removed. However, in practice, reassessments occur when they benefit the government, that is, when they are aimed in augmenting the total tax revenue. In the light of the above observation, which of the following describes a situation in which a reassessment should occur but is unlikely so? (1) (2) (3) (4) Property values have dropped significantly and uniformly. Property values have all risen, some very sharply and some less so. Property values have for the most part dropped significantly, yet some have riser slightly. Property values have risen sharply and uniformly.
39. The technological awareness of bicycle manufacturers is a reflection of the kinds of demand they are trying to meet. The only cyclists seriously interested in innovation and willing to pay for it are bicycle racers. Therefore, innovation in bicycle technology is limited by what authorities will accept as standard for purposes of competition in bicycle races. Which of the following is an assumption made in drawing the conclusion above? (1) (2) (3) (4) Bicycle racers do not generate a strong demand for innovation that fall outside what is officially recognised as standard for purpose of competition. The market for cheap, traditional cycles cannot expand unless the market for high performance competition bicycles expands. The authorities who set standards for high performance bicycle racing are not informed about innovation bicycle design. High performance bicycles are likely to be improved more as a result of technological innovations developed in small workshops than as a result of technological innovations developed in major manufacturing concerns.
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40. Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of the product. Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above? (1) (2) Although it sells all of the telephones that it produces, the share of Mammoth Industries in the overall sale of telephone has declined over the last year. Advertising has made the brand name of Mammoth Industries telephones widely known, but few consumers know that Mammoth Industries owns this brand. Despite a slight decline in the retail price, sales of Mammoth Industries telephones have fallen in the last year. Mammoth Industries average inventory of telephones awaiting, shipment to retailers has declined slightly over the last year.
(3) (4)
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Solutions
BJ Test No.01
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. It is clearly an irrelevant factor as far as decision making is concerned. Ans.(5) This is but a minor factor in choosing Ms. Gupta as her overall merit was given weightage. Ans.(3) It clearly was the major objective of Mr. Sharma in appointing Ms. Gupta. Ans.(1) It is an unimportant issue. Ans.(5) Mr. Sharma hoped that Ms. Gupta would stick to her job and hence it is an assumption. Ans.(4) Overall merit was the most crucial factor in Ms. Guptas appointment. Ans.(2) Given in the 4th para. Ans.(3) Clearly mentioned in para 2. Ans.(3) The contents of 4th para clearly tells that it was overall merit of Ms. Gupta and not personal grudge against Mr. Khanna. Ans.(1) It is given in para 1 that it was quality consciousness of Prakash Chemicals which was the catalyst of its growth. Ans.(1) Appointment of Ms. Gupta by Mr. Sharma is in line with the given statement. Ans.(2) It does not find a mention anywhere. Ans.(4) Retrenchment of workers by Prakash Chemicals corroborates the statement. Ans.(3) The passage states that Prakash Chemicals started as a small local level organisation but gradually grew into a nationally recognised and reputed corporation. The word meteoric is out of place. Hence (4) is the apt one. Ans.(4) This does not find a mention anywhere. Ans.(4) Nothing has been said categorically about it. Ans.(4) (2) seems to be the only feasible choice. Ans.(2) Sulphur based fertilizers of DFIL will revolutionise agriculture. Ans.(3) Can be directly inferred from the passage. Ans.(1) Can be directly inferred from the passage. Ans.(2)
15. 16. 17. 18. 19. 20.
Objective Key
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Solutions
BJ Test No.02
1. 2. 3. 4. 5. 6. Nothing has been mentioned in the passage in this regard. Hence (4). Ans.(4) Though it is not directly mentioned still it can be deduced from para 2 and 3 that these are necessary for child development. An oblique reference is made in the 3rd paragraph. Ans.(3) It is stated in the penultimate and also in the opening paragraph. Ans.(3) Launch of Nutrifit is clearly in line with the vision of Indiana Foods. Ans.(2) Directly mentioned in last line of para 1. Ans.(3) Launch of Nutrifit in Philippines indicates that it is a developing country because in the opening paragraph the objective of the launch of Nutrifit to combat the problem of hidden hunger in developing countries is mentioned. Ans.(3) Dr. Singer Wilson was a Professor of Nutrition in Cornell University. It is not stated that he was working with Indiana Foods. Ans.(1) As the murder took place during the course of employment, the watchman is liable for compensation. Ans.(1) Since accident was caused due to workmans willful disobedience, he is not liable for compensation. Ans.(2) Since the boy went against the orders, he is not liable to be compensated. Ans.(2) Sukhiram had finished his duty. Nobody had asked him or ordered him to return. He returned on his own. Ans.(2) Dukhiram stayed back on his own. On the contrary, he was advised not to stay back. Hence (2). Ans.(2) Since the workman was in transit, it is deemed as if he had commenced working, as his goal and destination was his workplace and nowhere else. Hence (1). Ans.(1) Option (1), (2) and (3) are not upto the mark. (4) specifically talks with the components of living wage. Ans.(4) Option (2) seems to be the right one. Ans.(2) (3) is the obvious choice. Ans.(3) (2) and (3) can easily be ignored. (4) talks of an act that is not mentioned. Hence (1). Ans.(1) (1) and (2) are out of place as it is clearly mentioned that Taylorism is the name given for scientific management. Option (3) is most Apt. Ans.(3) Multifunctionality will lead to its popularity. Ans.(2) It directly contradicts the factual situation. Ans.(1) Affordability will lead to its popularity. Ans.(2) Not mentioned anywhere. Ans.(4) Versatility will lead to its popularity. Ans.(2) It directly contradicts the factual situation. Ans.(1) Since the facade can be used as a part of building it has to be robust. Ans.(3)
7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.
Objective Key
(94) of (106)
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Solutions
BJ Test No.03
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. It would certainly be a major factor in Foodoo making the decision in favour of the launches, as such a huge market would sustain more than one player. Ans.(2) A major assumption that would work against the decision to introduce Vego. Ans.(4) A major assumption that with increasing affluence and may be lesser amounts of time available, people would consume processed foods. Ans.(4) Obviously a major objective for Foodoo. Ans.(1) Obviously this factor has the potential of being a major factor that can affect the sales of Drinkoo. Ans.(2) It is not being considered a major factor because it is not stated as an observed fact but a mere surmise. So it is a major assumption with the potential to upset Flouras applecart. Ans.(4) Obviously a major factor as it is a fact based on observation. Ans.(2) Though we are still talking of the food processing market, the issue is irrelevant as far as the current decision is concerned. Ans.(5) Because the market segment chosen by Alfa is a very narrow one, this factor will certainly be relevant but will not be a major factor. Ans.(3) It can be a major factor because the distribution reach of Foodoo this way will increase the number of retail outlets. Ans.(2) Obviously a major factor. Ans.(2) Again a major assumption because it is not a stated fact. Hence this assumption would have to be factored into its pricing by Foodoo if it wants to be successful with its launches. Ans.(4)
13.
23 20,000 cr. = 4600 cr . Ans.(1) 100

60 = 500 n n = Ans.(4) Can be directly inferred. Ans.(3) Content of the passage is all about marketers grabbing every opportunity to innovate. Ans.(2) Consciousness towards health has been exploited up to the hilt. Hence (4). Ans.(4) (3) is the most logical choice. Ans.(3) Even, is the key word which hints that on net almost anything can keep going. Ans.(1) (2) is the obvious choice. Ans.(2) Last line points to it. Ans.(2) The optimism of Feroze may backfire as share prices cannot be expected to remain bullish always. Ans.(3) The revamping of RML entailed a sound strategic plan for a sound turnaround. Hence (2). Ans.(2) RML was in a precarious state and Mr. Rajashekar Reddy had no reason to be satisfied. Hence (1). Ans.(1) Global players participation would have had a detrimental effect on RML. Hence (1). Ans.(1) The company was neck deep in litigation with suppliers and customers over receivables & payments. Ans.(3)
(95) of (106)
14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.
60 , n = 0.12. Ans.(2) 500
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28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
Production came to a standstill owing to an acute shortage of working capital. Hence (1). Ans.(1) Rajashekar Reddy was a major stakeholder in a US based computer company, VIGA. Hence (1). Ans.(1) RMLs workforce were unionised and militant, resorting to frequent go-slows and strikes. Hence (1). Ans.(1) The company being in a huge mess had nothing to do with Rajashekar Reddys hopes. Hence (4). Ans.(4) The culture of the organisation was bureaucratic and resisted change. Hence (1). Ans.(1) There was no paucity of employees but overstaffing short term funds were diverted for long term purposes. Hence (1). Ans.(1) This clearly will make Saturn popular amongst customers and will help in realising Saturns aim. Ans.(2) It is clearly mentioned in paragraph 4 that miniaturization has made product repair difficult. Ans.(1) Again in para 4, line 7, it is mentioned that, average costs have been reduced by 25% . Ans.(3) This clearly is in line with Saturns aim. Ans.(2) It is mentioned in para 4 that only products with large volumes can be exchanged and refurbished. Ans.(1) The maximum environmental impact is in product use phase. Ans.(1) Given in para 2, line 3, SDM-N50 liquid crystals display unique set of user features. Ans.(1)
Objective Key
(96) of (106)
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Solutions
BJ Test No.04
1. (1) is mentioned nowhere. Besides, Gondwanaland has been mentioned as a populous country and not the most populous country. The passage does not come out with this Canada is certainly not a queer name. Ans.(4) Geographically, Gondwanaland has been mentioned as country north, so it would be comparable to Greenland only. Ans.(3) You have a PM & an opposition leader and a legislative building hints enough that it would be nothing but Parliamentarianism. Ans.(3) Clearly to explain his absence from home. Ans.(4) (1) and (4) can be clearly ruled out. (2) has not been mentioned anywhere. Hence the only probable answer is (3). Ans.(3) The third paragraph mentions of legislative building as a high security area. (2) and (4) find no mention in the passage. Ans.(3) Other options (1),
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.
From the passage, the only feasible answer is (3). The remaining options are not realistic. Ans.(3) (4) is absurd. (1) may lead to panic amongst citizens. So the only remaining options are (2) and (3), out of which option (2) is certainly a faster and a more effective way. Ans.(2) Psycho relates to mind. Ans.(3) Since media has got a strong hold on public consciousness, it would be a major factor in it being chosen as the most effective way. Ans.(2) Obviously the major objective for calling the strategy meeting is to provide a safe haven for the citizens. Ans.(1) This is an assumption as it cannot be said with certainty that Aakrikaluala is lying because he could have really seen something which possibly he might have misinterpreted. Ans.(4) Proper information campaign can surely help in establishing a sense of security. Hence it has to be a major factor. Ans.(2) This obviously is an unimportant issue. Ans.(5) This could have been a major factor in causing the strategic meeting but nothing more than a minor factor in choosing the final counter-strategy. Ans.(3) The starting line of second para clearly tells this. Ans.(3) This clearly seems to leverage Nikitas mission. Hence (2) Ans.(2) In the passage it is given that only 24 million metric tonnes of industrial waste is utilized. The total waste is 450 million metric tonnes. Hence this fact cannot be deduced. Ans.(4) 4th para tells us clearly that Eco-cement is meant to address increasing garbage disposal problem in Japan. This is well in line with Nikitas mission. Hence (2) . Ans.(2) Here we have to use our judgement. As Nikita is increasingly conscious of environmental hazards of waste, it only shows that Japanese are environment conscious. Ans.(3) This is a totally irrelevant statement. Ans.(4) From the first para, Nikita seems to boldly challenge new business area so that a dynamic business development is achieved. Hence (2). Ans.(2) As part of the national project, on behalf of the Ministry of International Trade and Industry (MITI), option (3) indicates that the fact can be deduced from the passage. Hence (3). Ans.(3) NIMBY syndrome is about the problems of waste disposal. It cannot be deduced that it is anti environment. Ans.(4)
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(97) of (106)
25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36.
It is directly mentioned in the passage in the second paragraph. Ans.(3) This would be a major assumption in deciding in favour of choosing site 'B'. Hence (4). Ans.(4) This would be a minor factor in deciding to go for MELI SSA test as other factors like cost, returns, demand etc. would be the major factors. Ans.(3) For both site & service decisions, this would be the major objective. Ans.(1) This would again be a major objective for SHCL. Ans.(1) Because it is nowhere mentioned that SHCL is importing the machines or not. Ans.(5) It would be a major factor in deciding which site to choose for In-patient facilities. Ans.(2) It, too, would be a major factor in deciding to go for one of the diagnostic services. Ans.(2) It would be a major factor in deciding to offer Melissa test based diagnostic services. Ans.(2) It would be a major factor in deciding which site to choose-A, B or C, as most of the hospital facilities consume a lot of power. Ans.(2) This would obviously be nothing more than a minor factor in deciding which location to choose. Ans.(3) We need to use business judgement here in the true sense. If the operators are not readily available, they can be trained which is not in anyway a major hitch. Hence it would affect the decision only insignificantly. Ans.(3) It would be a major assumption in deciding the provision of diagnostic services. If it is assumed that doctors do not know the benefits of the diagnostic imaging of colored poppler, then what would logically, follow is that if educated they will certainly take to it and hence huge market would open up. Moreover it is no more than the Marketing Teams' own perception. Hence (4). Ans.(4) Site A = Total cost = 180 10,000 = 18,00,000 Site B = Total = 90 12,000 = 10,80,000
37.
38.
39.
720000 = 66.67% 67% . Ans.(2) 108000 Rs. 60,00,000 = 10,000x + 20,000x + 30,000x
6000000 Rs. 100 only.. Ans.(2) 60000 As CT scan facility is offered in the city by a lot of other labs too, the market is bound to be competitive. (3) too can be partly correct but it is not as apt as (2). Hence (2). Ans.(2)
x=
40.
Objective Key
(98) of (106)
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Solutions
BJ Test No.05
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. It obviously is a major factor in making the decision. Ans.(2) Read para 4, line 4, faced with the problems of glass jug breakage. Hence it is a major factor. Ans.(2) It obviously is the major objective. Ans.(1) Read second sentence para 6, sales would be doubled, given the potential demand. It is just an assumption. Ans.(3) It is a major factor. Ans.(2) Read second sentence para 6. Ans.(3) It clearly is an irrelevant factor. Ans.(4) It obviously is the major objective. Ans.(1) Read the closing lines of 6th para, ....was sure that he could sell 4000 gallons...... 4000 gallons means about 17% of total projected sales. (total = 20000 + 4000). Hence it is a major factor. Ans.(2) It clearly is an irrelevant factor. Ans.(4) It clearly contradicts the premise of the result. Ans.(1) It is mentioned that the Indian machine company produced a range of farm machinery but whether it is a limited range or wide range cannot be inferred. Ans.(4) It can easily be deduced. Ans.(3) The 2nd sentence of the last paragraph tells that customers wanted value. Ans.(1) It is clearly mentioned in the opening lines of the passage. Ans.(3) It is easily deducible from the closing sentence of the last para. Ans.(3) Providing better service in existing models was the basic premise of the final decision. Hence answer (2). Ans.(2) Obviously the opening line of the second paragraph tells of this. Ans.(3) It is easily deducible (2nd sentence, last para). Ans.(3) Clearly mentioned in the last line of 2nd para. Not deducible. Ans.(4) It is not stated anywhere in the passage. Ans.(4) It is clearly mentioned in the 3rd sentence of 4th paragraph and it has to be a major factor in making the decision. Ans.(2) It is clearly mentioned in the passage that demand of Swamis toys had increased. It was a healthy sign to show companys growing presence in the market. Hence it has to be a major factor in making the decision. Ans.(2) It is clearly a very insignificant statement. Hence the answer 5. Ans.(5) Employment of employees in a firm is neutral process & it is not meant to affect the company policies. Hence (5). Ans.(5) It is clearly the major objective. Ans.(1) It has to be a major factor as it is bound to make an impact on customers. Ans.(2) It is clearly the major objective. Ans.(1) It is an insignificant factor on the final decision. Hence option is (5). Ans.(5) Referring to para 5 ; it was only Mr. Swamis suggestion that opening an attached showroom could boost sales. Hence it is an assumption. Ans.(4)
(99) of (106)
Ans.(3)
25. 26. 27. 28. 29. 30. 31.
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32. 33. 34. 35. 36. 37. 38. 39. 40.
It is obviously the key issue. Hence (1). Ans.(1) It is clearly a major factor and can easily be inferred from para (1). Ans.(2) It can clearly be inferred from para 5 that Mr. Swamis intentions are to increase profits with more retail outlets. Hence the option (1). Ans.(1) Given in para 8. It was Mr. Swamis plans but it is only on assumption that Mr. Swami makes. Ans.(4) Clearly given in the 15th sentence of 4th para. Ans.(2) Clearly mentioned the 2nd last sentence of 15th para. Ans.(2) Affordability will certainly boost up sales. Ans.(3) Option (4) is the obvious choice. Ans.(4) The passage deals with time management capacity of executives. Ans.(2)
Objective Key
(100) of (106)
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Solutions
BJ Test No.06
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. The fourth paragraph in the passage comes out with this mention. Ans.(3) The second paragraph is about the recent launch of the operations by the company, and not since two decades as mentioned in the question statement. Hence (1). Ans.(1) Although the market potential in India is spelt out, it cannot be concluded that the marketing plans of Shimazdu are realistic. Hence item (4). Ans.(4) From the passage, it can be concluded that only through aggressive marketing can expensive products be marketed. Ans.(3) Although elaborate strategies have been worked out, it cannot be said or concluded that marketing operations of the company would be a successful launch. Hence (4). Ans.(4) The last paragraph as well as the opening paragraph has stated Wipro GE, Philips and Siemens to be the major rival players. Sony has no mention. Hence (1). Ans.(1) The seventh paragraph is all about the modifications in the technology of the product to be adaptive to Indian conditions. Hence (3). Ans.(3) The fifth paragraph comes out with this statement. The third paragraph is all about this statement. Ans.(3) The passage has nowhere stated the cost effectiveness of MRI scanners. They have been described as costly equipment. Ans.(1) Nowhere is it mentioned that the employees of Cleano were generally dissatisfied with the management. As far as the consultancy project was concerned, the workers were constructively apprehensive. Ans.(2) MD not mentioned. Ans.(4) Not mentioned. Ans.(4) Other three alternatives have been mentioned clearly in the passage to be the direct result of competition between the 2 companies, As far as spurious brands are concerned, their presence only worsened the situation. Ans.(2) It is directly given in the passage. Ans.(3) It analyses the events and situations well. Ans.(2) Can be calculated because cost escalation (rise) of Rs 7O crores = 128 % of the original X. Hence, 2.28 X - X = 7O or X = Rs 55 crores. Ans.(1) Loss of mandays means strike; Not specifically mentioned. Ans.(2) Last paragraph clearly indicates this. Ans.(2) Mentioned in the word affordability. Ans.(4) The last paragraph tells us that it was a supporting factor. Ans.(3) Not relevant to the decision. Ans.(5) Not relevant. Ans.(5) Not relevant. Ans.(5) A basic reason for all the management efforts for a truce. Ans.(2) Indeed the prime aim/objective of the managements. Ans.(1) Assumed by the managements that such an agreement will be workable, although no prior record or experience exists for the same. Ans.(4) Ans.(3)
15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.
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(101) of (106)
28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
One of the reasons that led to falling profits & forced the managements to think about a mutual agreement. Ans.(2) Not relevant. Ans.(5) Not related to the direct competition but contributing to falling profits. Ans.(3) The passage basically deals with problems of lending. Ans.(2) Non Performing Assets are those which do not contribute to the profitability. Ans.(3) Can be directly got from the passage. Ans.(1) It is the content of Mirinda ads that is discussed. Ans.(2) It controls the functioning of banks. Ans.(1) Obvious choice. More players means more cash inflow. Ans.(2) It is the changing strategies that have been discussed. Ans.(3) Ans.(2) Ans.(1) Ans.(3)
Objective Key
(102) of (106)
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Solutions
BJ Test No.07
1. 2. 3. 4. It is a major factor influencing a business decision. Ans.(2) Small batch sizes at Nimbus add to personalised attention and is a major factor to be taken into account when working out a business decision. Ans.(2) Yes it is certainly a major factor. Ans.(2) Its a well known fact that updation and upgradation of a product is the determinant of its saleability. Hence a courseware which is not obsolescent sells. Thus this is a major objective for Nimbus. Ans.(1) Career counselling plays a key role in a successful run of professional organisation. Ans.(2) Clearly this is major objective as the strength and reputation of a organisation is dependent on the preservation of its brand equity. Ans.(1) This is a minor and an unimportant issue. Ans.(4) Since the word Possibility is used, therefore this is a major assumption to be reckoned while formulating the business decision. Ans.(3) It is a major factor affecting a business decision. Ans.(2) This is a trivial and an insignificant issue. Ans.(4) This is a trivial and an insignificant issue. Ans.(4) This is a trivial and an insignificant issue. Ans.(4) The might of an organisation is felt by the influence wielded in the market . Therefore this is a major objective for Nimbus. Ans.(1) This would not adversely affect the reputation of Nimbus. Ans.(4) This is not linked to the prosperity of Nimbus, as there may be several other clients besides Citywest. Ans.(4) Major factor. Obviously the findings of the survey would be a major factor in reducing the apprehensions of Harminder and encouraging him to go for the Car Wash. Ans.(2) Major objective. Obviously, this is the motive for which all the activities are being undertaken. Ans.(1) Clearly a major assumption, which is the basis of Harminder seeking out a different source to raise revenue. Ans.(4) A major factor that can upset Meena & Harminders calculations to start the car wash business. Ans.(2) A minor factor at the most, because the bank is ready to lend to Harminder and if finance be a major problem. It can be easily overcome this way even though it is a bit circuitous. Ans.(3) This would negatively affect Harminders plans to stock fruits & vegetables and may turn him towards the car wash proposal. Ans.(2) Obviously a major factor that would affect the offtake of oil from Makhijas and hence accentuate the need to diversify. Ans.(2) Most probably a major factor that has the potential to turn Meena & Harminder away from the car wash proposal. Ans.(2) Obviously a major objective. To increase the margins & profitability is what Harminder & Meena are looking for. Ans.(1) Pretty irrelevant. Because the first thing that matters is whether Meena & Harminder think it worthwhile to enter the business. Moreover in a total minimum project time of 10 weeks, half-a-week would not
(103) of (106)
5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.
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really make much of difference. Ans.(5) 26. 27. 28. 29. 30. 31. The maximum duration of a sequential set of activities in the Fig-1. Activity relationship shows it clearly. Ans.(2) Clear from the Table (4). Ans.(1) See table (3). Fuel is the profit centre. Desired percentage is Clear from table 5. Ans.(3) Ans.(4) Option (3) is the apt one. If (3) werent assumed, the costs of the services given by famous singers in rendering well-known songs would not have had a bearing on costs of advertisement. Since it is given that high cost of advertising is due to famous singers rendition of songs. Option (3) is in place. Ans.(3) As per option (2), the effect of lowering wages is to reduce quality sufficiently to reduce sales. This is a good reason to doubt that wage cuts would give Kirit Industries any competitive advantage. Hence option (2) is the correct one. Ans.(2) The underlying assumption is that a particular prediction can cause a currency decline only if accompanied by a large budget deficit. The given option (3) states that large budget deficit is not required to predict the decline in currency, Option (3) is the appropriate one. Ans.(3) If the original contractual price for the weapons purchased incorporated an inefficient use of funds, since historical costing merely adds to the original price, it preserves these inefficiencies. An economically sound pricing method should least allow the possibility of reductions in prices as such inefficiencies are removed. Hence option (1) is correct. Ans.(1) An explanation is sought as to why price reduction and mass marketing methods should not be used for premium products. Option (3) fits in by stating that the sale of these products require them to appear special. Ans.(3) Based on the observed correlation between arms testing and peoples tendency to save money, the argument concludes that a causal connection between a perception of threat and the tendency not to save exists. For this option (4) serves as the best link if it is assumed to be true. Ans.(3) The threat imagined by the author as regards the economic survival of workers displaced by automation will be serious only if they cannot find new jobs. Option (4) best signifies this. Ans.(4) Option (3) is the best answer as the criticism of the proposed purely quantitative measure of productivity raises the issue of quality of service, which implies that quality of service is a potentially relevant consideration. Ans.(3) Option (2) weakens the argument as in that case, the lawyers who begin advertising when the restriction is removed might all be among those who do not lower their fees on beginning to advertise, in which case no decrease in consumer legal costs will occur. Ans.(3) The conclusion drawn is that as regards royalty retention of the works of faculty members, software should be reckoned with books and articles and not with inventions. The required additional premise is that software is more comparable with books and articles rather than with inventions, which is what option (1) states. Ans.(4)
37636 100 114%. Ans.(3) 33000
32.
33.
34.
35.
36.
37. 38.
39.
40.
Objective Key
(104) of (106)
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Solutions
BJ Test No.08
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. It is a minor factor in arriving at the business decision. Ans.(3) It is a major factor to be incorporated when making business decision. Ans.(2) Obviously a major factor to be reckoned. Ans.(2) Since nothing can be foretold, hence it is a major assumption. Certainly a major objective for the organisation. Ans.(1) A trivial and an unimportant issue. Ans.(5) Yes, a major objective. Ans.(1) Since consumer apprehensions need to be set at rest, it is a major factor. Ans.(2) A major factor influencing business decision. Ans.(2) Nothing is predictable, hence an unimportant issue. Ans.(5) Nothing is predictable, hence an unimportant issue. Ans.(5) A minor matter but cannot be ignored. Ans.(3) A major assumption to be made during business decision making. Ans.(4) A minor matter on account of its flexibility. Ans.(3) Obviously from the last paragraph. Ans.(3) Straight from the third paragraph. Ans.(1) Straight from the third paragraph. Ans.(3) The third last paragraph states this. Ans.(2) The fourth paragraph states this. Ans.(3) The fifth paragraph states this. Ans.(1) A major factor for decision making. Ans.(2) Again a major factor. Ans.(2) An unimportant issue. Ans.(4) A major objective for any company, not to talk of Swan International Ltd. Ans.(1) A major assumption aiding decision making. Ans.(3) A major objective which is the strength of the company. Ans.(1) An unimportant issue. Ans.(4) A major assumption as nothing can be foretold. Ans.(3) A major objective. Ans.(1) A major factor to be considered for decision making. Ans.(2) Yes, a major objective for the company. Ans.(1) A major assumption to be made when making decision. Ans.(3) A major factor to be considered while arriving at the decision. A trivial and an insignificant issue. Ans.(4) A trivial and an insignificant issue. Ans.(4) As per option (2), the ruling cannot be applied in a legally acceptable manner. The remaining option do not cast doubts on the effectiveness of the ruling. Ans.(2) Ans.(2) Ans.(4)
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(105) of (106)
37. 38. 39.
The main problem is delays at airports, with a solution offered. Option (4) traces the problem elsewhere, thereby casting doubts on the effectiveness of the solution. Ans.(4) Option (3) best describes the situation caused by the slash in most property values warranting a reassessment but would be unlikely, as the government would not stand to gain from it. Ans.(3) Option (1) is the best answer. If racers, the only cyclists interested in innovation, created a strong demand for innovations for purposes other than official competition, the conclusion would not follow. Ans.(1) Option (3) is the correct one because Mammoth Industries does not fall in the industry trend of higher sales, despite heavy advertising. Producing more of the same model would thus in all unlikelihood generate increased sales for Mammoth Industries. Ans.(3)
40.
Objective Key
(106) of (106)
IC : PTpnsbj01

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Business Judgement Book

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Basics of Business Judgement

Data Application Problems

Data Evaluation Problems

Data Application Questions

One (1) (2) (3) (4) (5)

Solutions to Classroom Exercise

18. 19. 20. 21.

6. 7. 8. 9. 10. 11. 12. 13. 14.

24. 25. 26.

27. 28. 29. 30. 31.

47. 48. 49. 50. 51. 52. 53.

54. 55. 56.

58. 59. 60.

61. 62. 63.

44. 45. 46.

Time allowed : 20 mins

Time allowed : 20 mins

Time allowed : 30 mins

Ahmedabad None of the above.

Time allowed : 30 mins

Time allowed : 30 mins

10. Value of patent held by Mr. Agrawal.

Time allowed : 30 mins

Data Application Questions

Data Evaluation Questions

Time allowed : 30 mins

P & L Account year ending 31/03/2002

2,964,559 2,699,359 265,200 15,090 280,290

Balance sheet as on 31/03/2002

Table 3 2001/2002 Budget By profit centre

Table 4 Fuel tank and sales

Date 06/01/02 31/03/02 01/04/02 12/04/02 15/05/02

Department forecourt forecourt forecourt workshop forecourt

Status casual FT casual FT casual

Time allowed : 20 mins

15. 16. 17. 18. 19. 20.

23 20,000 cr. = 4600 cr . Ans.(1) 100

60 , n = 0.12. Ans.(2) 500

25. 26. 27. 28. 29. 30. 31.

32. 33. 34. 35. 36. 37. 38. 39. 40.

37636 100 114%. Ans.(3) 33000

37. 38. 39.

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