XAT Decision Making MCQ Quiz - 1 - CAT MCQ

A major telecom company recently hired a new Chief Financial Officer to take command of the company’s finances. This move came against the backdrop of national and global economic crises.
The CFO is charged with the responsibility of realigning the finances of the largest Strategic Business Unit which deals with network solutions to major corporate clients in the country. In wake of the overall financial slump, many of the corporate clients have been delaying the payment of their recurring dues for the monthly network and internet services utilised. The local account managers handling those clients and their respective Regional Managers had been given the authority to maintain client relations and if necessary allow the delayed payments with a view to continue a long-term relationship with the key clients. However, the new CFO after taking stock of the situation decided to put an affirmative end to this practice. He sent a mail to every regional and local account manager asking them to discontinue services to the defaulting clients. In spite of such a strong communication, most major clients delayed the payments in the next month. As a response to this, the CFO resent his earlier mail asking for comments. In the next month, the single largest client defaulted on the payment and the regional manager promptly asked the technology company to terminate services to that client. The regional manger merely informed the client that the delay in payment was responsible for the termination of services and the service would be reconstituted on payment of the dues.
The client faced severe difficulties due to discontinuation of the internet and local network services. The CEO of that company wrote a scathing email to the Chairman of the telecom company.
The CEO pointed out the sudden, mishandled and improperly communicated decision and its severe impact on his company’s business. He pointed out that they were one of the largest clients of the telecom company. The CEO also hinted that his company would want to reconsider their future engagement. The Chairman decided to maintain the relations with that important client and yet protect his company’s image. He promptly restarted the network services and yet requested the client to clear the dues within a week and to avoid major delays especially in these times of crisis. The client replied to this communication, agreeing to the specified norms. However, the Chairman decided to severely reprimand the Regional Manager and suspended him for 2 weeks. He also severely questioned the CFO for his error. At the next board of directors meeting, there was support for the Chairman’s action in spite of protests by some senior directors who defended the CFO and the Regional Manager's actions.

Q. Assuming that the crisis continues, the future course of action by the Account managers and Regional managers would be:

A major telecom company recently hired a new Chief Financial Officer to take command of the company’s finances. This move came against the backdrop of national and global economic crises.
The CFO is charged with the responsibility of realigning the finances of the largest Strategic Business Unit which deals with network solutions to major corporate clients in the country. In wake of the overall financial slump, many of the corporate clients have been delaying the payment of their recurring dues for the monthly network and internet services utilised. The local account managers handling those clients and their respective Regional Managers had been given the authority to maintain client relations and if necessary allow the delayed payments with a view to continue a long-term relationship with the key clients. However, the new CFO after taking stock of the situation decided to put an affirmative end to this practice. He sent a mail to every regional and local account manager asking them to discontinue services to the defaulting clients. In spite of such a strong communication, most major clients delayed the payments in the next month. As a response to this, the CFO resent his earlier mail asking for comments. In the next month, the single largest client defaulted on the payment and the regional manager promptly asked the technology company to terminate services to that client. The regional manger merely informed the client that the delay in payment was responsible for the termination of services and the service would be reconstituted on payment of the dues.
The client faced severe difficulties due to discontinuation of the internet and local network services. The CEO of that company wrote a scathing email to the Chairman of the telecom company.
The CEO pointed out the sudden, mishandled and improperly communicated decision and its severe impact on his company’s business. He pointed out that they were one of the largest clients of the telecom company. The CEO also hinted that his company would want to reconsider their future engagement. The Chairman decided to maintain the relations with that important client and yet protect his company’s image. He promptly restarted the network services and yet requested the client to clear the dues within a week and to avoid major delays especially in these times of crisis. The client replied to this communication, agreeing to the specified norms. However, the Chairman decided to severely reprimand the Regional Manager and suspended him for 2 weeks. He also severely questioned the CFO for his error. At the next board of directors meeting, there was support for the Chairman’s action in spite of protests by some senior directors who defended the CFO and the Regional Manager's actions.

Q. The client’s action, and the Chairman’s response to the same, display what important aspect of decision-making shown by the Chairman?

                                                                                    Group Question

The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

You are the newly appointed financial controller in LMB Ltd., a large private engineering company. This is your first appointment in industry having undertaken your training at a large accountancy firm where most of your experience was gained in the audit of large NSE 500 clients. LMB Ltd. makes components which are used in the manufacture of various household products and it has a wide customer base from large household names through to small local private businesses.

One of your first tasks is to undertake a view of aged debtors. Whilst undertaking your review you find that a small number of customers have credit balances on their sales ledger accounts. The amounts relate to invoices which are now over 9 months old and which appear to have been paid twice. You find this odd and decide to raise the issue with your boss, Dushyant, the Financial Director, at your next meeting.

The following morning, Dushyant calls you into his office and asks you how you are settling into your position. You respond that, although you are still finding your feet, you have been making a major effort to get up to speed with the company's business and systems and controls. Dushyant appreciates your enthusiasm and is pleased that he has managed to recruit someone so enthusiastic.

Dushyant then asks whether anything has come to your attention so far. You advise him of what you have found in relation to the customers who appear to have paid twice. Dushyant laughs and tells you that it balances out in the end.

Furthermore, he produces copies of letters from a file which are addressed to the Financial Directors at the respective customers informing them of their company's overpayment. You return to your desk - rather bewildered by his comments. Customers have overpaid and he knows this to be the case, yet he has no intention of returning their money unless prompted by the customer. 

You find it perplexing to think that the Financial Directors of the companies that have overpaid have not responded on being notified about the outstanding invoices.

Q. In the light of the given situation, which of the following is the most sound judgment?

You are the newly appointed financial controller in LMB Ltd., a large private engineering company. This is your first appointment in industry having undertaken your training at a large accountancy firm where most of your experience was gained in the audit of large NSE 500 clients. LMB Ltd. makes components which are used in the manufacture of various household products and it has a wide customer base from large household names through to small local private businesses.

One of your first tasks is to undertake a view of aged debtors. Whilst undertaking your review you find that a small number of customers have credit balances on their sales ledger accounts. The amounts relate to invoices which are now over 9 months old and which appear to have been paid twice. You find this odd and decide to raise the issue with your boss, Dushyant, the Financial Director, at your next meeting.

The following morning, Dushyant calls you into his office and asks you how you are settling into your position. You respond that, although you are still finding your feet, you have been making a major effort to get up to speed with the company's business and systems and controls. Dushyant appreciates your enthusiasm and is pleased that he has managed to recruit someone so enthusiastic.

Dushyant then asks whether anything has come to your attention so far. You advise him of what you have found in relation to the customers who appear to have paid twice. Dushyant laughs and tells you that it balances out in the end.

Furthermore, he produces copies of letters from a file which are addressed to the Financial Directors at the respective customers informing them of their company's overpayment. You return to your desk - rather bewildered by his comments. Customers have overpaid and he knows this to be the case, yet he has no intention of returning their money unless prompted by the customer. 

You find it perplexing to think that the Financial Directors of the companies that have overpaid have not responded on being notified about the outstanding invoices.

Q. A couple of months pass when, whilst undertaking another review, you notice that a customer, Moe Controls Ltd., has once again paid the amount due by them twice. You decide to discuss this with Dushyant with a view to issuing an immediate repayment or at the very least, a credit note, as the company is a regular customer. Dushyant advises you that he will deal with this by personally writing to the Financial Director at Moe Controls Ltd. - he advises you that at this stage there is no need to issue a credit note or make a repayment. 

You are not at ease with his assurance, you decide to:

You are the newly appointed financial controller in LMB Ltd., a large private engineering company. This is your first appointment in industry having undertaken your training at a large accountancy firm where most of your experience was gained in the audit of large NSE 500 clients. LMB Ltd. makes components which are used in the manufacture of various household products and it has a wide customer base from large household names through to small local private businesses.

One of your first tasks is to undertake a view of aged debtors. Whilst undertaking your review you find that a small number of customers have credit balances on their sales ledger accounts. The amounts relate to invoices which are now over 9 months old and which appear to have been paid twice. You find this odd and decide to raise the issue with your boss, Dushyant, the Financial Director, at your next meeting.

The following morning, Dushyant calls you into his office and asks you how you are settling into your position. You respond that, although you are still finding your feet, you have been making a major effort to get up to speed with the company's business and systems and controls. Dushyant appreciates your enthusiasm and is pleased that he has managed to recruit someone so enthusiastic.

Dushyant then asks whether anything has come to your attention so far. You advise him of what you have found in relation to the customers who appear to have paid twice. Dushyant laughs and tells you that it balances out in the end.

Furthermore, he produces copies of letters from a file which are addressed to the Financial Directors at the respective customers informing them of their company's overpayment. You return to your desk - rather bewildered by his comments. Customers have overpaid and he knows this to be the case, yet he has no intention of returning their money unless prompted by the customer. 

You find it perplexing to think that the Financial Directors of the companies that have overpaid have not responded on being notified about the outstanding invoices.

Q. A&M Ltd. was one of the customers that had paid twice. Despite being notified about the same, the company had not responded to the formal communication sent by LMB Ltd. Yet, the Financial Director of A&M Ltd is very distraught that LMB Ltd. did not issue a refund sooner, especially when the two companies continued their association. A&M Ltd. has now threatened to exit all contracts with LMB Ltd.Which of the following steps would you take to salvage the situation? 

                                                                                     Group Question

Answer the following question based on the information given below.

A car accident occurred on a busy street intersection killing two people and injuring three others. In order to nab the culprits, the police took the statements of all the witnesses present at that intersection, when the accident happened.
Some of the witnesses were in a state of shock because of the horrific accident and were unable to correctly reproduce the details of the accident. The witnesses who were in a state of shock provided all incorrect details while the rest of the witnesses provide the correct information about the accident. 

The following statements have been recorded by the police:

Witness 1: Three people were killed in the accident by a red car that ran over them.
Witness 2: The green car had a license plate with eight symbols on it, two of them being letters and the rest being digits.
Witness 3: The car was blue in colour and was being driven by a young man with two people sitting in the backseat, one of them being a woman.
Witness 4: Each of the last four digits on the license plate of the car was a power of the same number and they were in the ascending order.
Witness 5: There was a blue car involved in the accident and a yellow car was right behind it. The blue car injured two people and rushed away from the spot.
Witness 6: The car was a green Maruti with four people in it. The car hit five people injuring three of them.
Witness 7: If numbers are assigned to the two letters on the license plate of the car with A being 1, B being 2 and so on, then the sum of the two letters on the license plate was equal to the sum of the last four digits. The letters were from A-I with the letter with the lower value coming first. The last four digits were in the ascending order.

Q. What is the colour of the car that was involved in the  accident? 

A car accident occurred on a busy street intersection killing two people and injuring three others. In order to nab the culprits, the police took the statements of all the witnesses present at that intersection, when the accident happened.
Some of the witnesses were in a state of shock because of the horrific accident and were unable to correctly reproduce the details of the accident. The witnesses who were in a state of shock provided all incorrect details while the rest of the witnesses provide the correct information about the accident. 

The following statements have been recorded by the police:

Witness 1: Three people were killed in the accident by a red car that ran over them.
Witness 2: The green car had a license plate with eight symbols on it, two of them being letters and the rest being digits.
Witness 3: The car was blue in colour and was being driven by a young man with two people sitting in the backseat, one of them being a woman.
Witness 4: Each of the last four digits on the license plate of the car was a power of the same number and they were in the ascending order.
Witness 5: There was a blue car involved in the accident and a yellow car was right behind it. The blue car injured two people and rushed away from the spot.
Witness 6: The car was a green Maruti with four people in it. The car hit five people injuring three of them.
Witness 7: If numbers are assigned to the two letters on the license plate of the car with A being 1, B being 2 and so on, then the sum of the two letters on the license plate was equal to the sum of the last four digits. The letters were from A-I with the letter with the lower value coming first. The last four digits were in the ascending order.

Q. How many witnesses are surely in a shocked state? 

A car accident occurred on a busy street intersection killing two people and injuring three others. In order to nab the culprits, the police took the statements of all the witnesses present at that intersection, when the accident happened.
Some of the witnesses were in a state of shock because of the horrific accident and were unable to correctly reproduce the details of the accident. The witnesses who were in a state of shock provided all incorrect details while the rest of the witnesses provide the correct information about the accident. 

The following statements have been recorded by the police:

Witness 1: Three people were killed in the accident by a red car that ran over them.
Witness 2: The green car had a license plate with eight symbols on it, two of them being letters and the rest being digits.
Witness 3: The car was blue in colour and was being driven by a young man with two people sitting in the backseat, one of them being a woman.
Witness 4: Each of the last four digits on the license plate of the car was a power of the same number and they were in the ascending order.
Witness 5: There was a blue car involved in the accident and a yellow car was right behind it. The blue car injured two people and rushed away from the spot.
Witness 6: The car was a green Maruti with four people in it. The car hit five people injuring three of them.
Witness 7: If numbers are assigned to the two letters on the license plate of the car with A being 1, B being 2 and so on, then the sum of the two letters on the license plate was equal to the sum of the last four digits. The letters were from A-l with the letter with the lower value coming first. The last four digits were in the ascending order.

 Q. Among the last four digits on the license plate, what was the difference between the last digit and the first digit?

A car accident occurred on a busy street intersection killing two people and injuring three others. In order to nab the culprits, the police took the statements of all the witnesses present at that intersection, when the accident happened.
Some of the witnesses were in a state of shock because of the horrific accident and were unable to correctly reproduce the details of the accident. The witnesses who were in a state of shock provided all incorrect details while the rest of the witnesses provide the correct information about the accident. 

The following statements have been recorded by the police:

Witness 1: Three people were killed in the accident by a red car that ran over them.
Witness 2: The green car had a license plate with eight symbols on it, two of them being letters and the rest being digits.
Witness 3: The car was blue in colour and was being driven by a young man with two people sitting in the backseat, one of them being a woman.
Witness 4: Each of the last four digits on the license plate of the car was a power of the same number and they were in the ascending order.
Witness 5: There was a blue car involved in the accident and a yellow car was right behind it. The blue car injured two people and rushed away from the spot.
Witness 6: The car was a green Maruti with four people in it. The car hit five people injuring three of them.
Witness 7: If numbers are assigned to the two letters on the license plate of the car with A being 1, B being 2 and so on, then the sum of the two letters on the license plate was equal to the sum of the last four digits. The letters were from A-l with the letter with the lower value coming first. The last four digits were in the ascending order.

Q. Which of the following could have been the first letter in the license plate?  

Amazing Chips Ltd., a snacks manufacturing company located in Delhi, as of now sells its products in the Delhi and NCR region only. Since the company had been doing quite well for the last three years, the management is thinking of expanding the business pan India. To ensure that the expansion plan would be profitable, the management decided to undertake a cost benefit analysis.

Which are the factors that the management must consider for their cost-benefit study?

I. Operations and Logistics Cost

II. Marketing Expense

III. Only Local Competition in the new cities

IV. Both Local and National competition

V. Working Capital

VI. New factory

VII. Human Resources

V III . Price

Read the following situation and choose the best possible alternative.

Mr. Shailesh Ahuja, project manager in a multinational, has to nominate one employee from his team of fifteen for the ‘Employee of the year' award. The recipient of the award will get a cash bonus and an opportunity to meet the CEO of the company. The rules clearly state that every project manager can nominate just one person irrespective of their team strength. However, Mr. Ahuja is convinced that both Subramaniam and Santosh are worthy of this award.

How should Mr. Ahuja go about selecting the best nominee for the award?

Group Question

Answer the following question based on the information given below.

Shu-Tee is a medium-size manufacturing company. The company is more than 50 years old and many of the managers in the company have come from the ranks, so to speak. Recently, the Baby Boomers have started to retire and they are being replaced with Generation Yers. The remaining staff members taking the roles in the management team are Generation Xers.
These two generations (Gen X and Gen Y) are clashing in the workplace. Since the Gen Y employees have been at the company for such a short amount of time, they have very little loyalty or reason to stay. Hence, they are leaving the company at an alarming rate and the incoming replacements also are from the Gen Y group, so the problems will most likely repeat itself over and over.

Q. Simon is a generation X employee in Shu-Tee. He is clashing with most of the new Gen Y employees. Simon believes in micro-managing while the Gen Yers need a lot of autonomy while working. Simon would leave the organization but has a house loan to repay and would not want to start anew with the poor market scenario. He also feels that he has put in a lot of effort to take the organization where it is today. What should Simon/ Gen Y/ the management do for the benefit of Shu-Tee ?   

Shu-Tee is a medium-size manufacturing company. The company is more than 50 years old and many of the managers in the company have come from the ranks, so to speak. Recently, the Baby Boomers have started to retire and they are being replaced with Generation Yers. The remaining staff members taking the roles in the management team are Generation Xers.
These two generations (Gen X and Gen Y) are clashing in the workplace. Since the Gen Y employees have been at the company for such a short amount of time, they have very little loyalty or reason to stay. Hence, they are leaving the company at an alarming rate and the incoming replacements also are from the Gen Y group, so the problems will most likely repeat itself over and over.

Q. If you were hired as an advisor for Shu-Tee, what would you say needs to happen to slow down the exit rate and make sure the situation doesn’t repeat itself with the new staff?

Read the following passage and answer the question that follows.

As a generation, we are rethinking what we are to others. Our technological prowess has become a wireless lifeline for others. Some of us apply ourselves to innovation: hackathons and other forms of technological creativity. Our families look to us to know how to use technology both to waste time and to make meaning. Some of us set up Facetime for those denied face-to-face time. We show them it will be OK, that digital relationships are real relationships - though in fact we are not always sure.

Which of the following will be the most MEANINGFUL conclusion of the passage?

Shu-Tee is a medium-size manufacturing company. The company is more than 50 years old and many of the managers in the company have come from the ranks, so to speak. Recently, the Baby Boomers have started to retire and they are being replaced with Generation Yers. The remaining staff members taking the roles in the management team are Generation Xers.
These two generations (Gen X and Gen Y) are clashing in the workplace. Since the Gen Y employees have been at the company for such a short amount of time, they have very little loyalty or reason to stay. Hence, they are leaving the company at an alarming rate and the incoming replacements also are from the Gen Y group, so the problems will most likely repeat itself over and over.

Q. You are a Gen Y employee who has been with Shu-Tee for 2 weeks now. You are frustrated with your project managers constantly changing since a few have retired while the Gen Y managers have left for better prospects. You have great inputs for the project but it seems to be going nowhere due to lack of leadership. Which of these is the decision you would most likely take?

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

What is the best course of action by that should be taken by the collector?

Answer the following question based on the information given below.

The Disciplinary Committee of National Political Party (NPP) is meeting today to decide on the future of two of their party members, Mr. Loyal and his son Mr. Prodigal. Mr. Prodigal is the prime accused in the brutal murder of Mr. Victim, an opposition party leader. Mr. Prodigal is in police custody and his appeal for bail has got rejected. Mr. Loyal claims that his son is innocent and Mr. Victim’s death was the result of internal rivalry in the opposition party. Though Mr. Loyal is not accused in this case, his weakness for his son is well known. The media is blaming him for influencing key witnesses to protect his son. Severe criticism of this father-son ,duo, both by the media and some social activists, is damaging the image of the party. However, Mr. Loyal has significant followers within the party and is considered an asset to the party. Any harsh decision against Mr. Loyal would adversely affect the future of NPP and could even lead to a split in the party. This would benefit the opposition.

Which of the following actions would adversely affect both NPP and Mr. Loyal, the most?