# XAT Analytical Reasoning and Decision Making Practice Questions Set-2

XAT Analytical Reasoning and Decision Making Practice Questions Set-2: This practice set has 10 questions with their answers covering topics from the areas of Analytical Reasoning.

XAT Analytical Reasoning and Decision Making Practice Questions Set 2

XAT Analytical Reasoning Practice questions Set-2: This practice set has 10 questions with their answers covering topics from the areas of Analytical Reasoning. This Practice set includes the Questions as per the XAT Exam pattern and syllabus.

Directions for (1 – 4):

At the Indian Academy of Dramatic Arts, the following six plays are scheduled in a day as shown below in the table:

 S. No Play Duration Show Timings 1 The Adams Family 1 hour 9:00 am and 2:00 pm 2 Breakfast at Tiffany’s 1 hour 10:30 am and 11:30 pm 3 Cinderella 30 minutes 10:00 am and 11:00 am 4 Footloose 1 hour 10:00 am and 11:00 am 5 The Phantom of the Opera 1 hour 9:30 am, 12:00 noon and 2:00 pm 6 The Wizard of Oz 30 minutes 11:00 am and 1:30 pm

You wish to see all the six plays. Further, you wish to ensure that you get a lunch break from 12:30 pm to 1:30 pm.

1. Which of the following play will be shown after Lunch Break?

a) The Phantom of the Opera

b) Breakfast at Tiffany’s

c) The Wizard of Oz

d) Cinderella

2. Which of the following play will be shown at 10:00 am?

a) Cinderella

b) Footloose

c) Either Cinderella or Footloose

d) None of the above

3. In which of the following sequence the plays will be shown?

a) The Adams Family – 1st; Cinderella – 3rd; and the Wizard of Oz – 6th.

b) The Adams Family – 6th; Footloose – 3rd; and the Phantom of the Opera – 1st.

c) The Adams Family – 1st; Cinderella – 3rd; and Breakfast at Tiffany’s – 4th.

d) Footloose – 3rd; the Phantom of the Opera – 4th; the Wizard of Oz – 5th.

4. Which of the following play will be shown last?

b) The Wizard of Oz

c) The Phantom of the Opera

d) Either The Adams Family or The Phantom of the Opera

Direction (5-7): Answer questions on the basis of information given in the following case.

Karim’s was a popular fast-food joint at Hauz Khas, Delhi. Initially Karim handled his business alone. His sons, Iqbal and Ahmed, joined the business after graduation from college. Iqbal was entrepreneurial in nature. Subsequently, another branch of Karim’s was opened in Ambala. Karim had chosen Iqbal to head the Ambala branch. Though Iqbal increased sales in short time, he had stopped using premium quality organic vegetables, the speciality of Karim’s. Karim and Ahmed were not happy with his way of doing business.

Now, the foremost challenge for Karim was to sort out this issue with Iqbal. Karim knew that replacing Iqbal with Ahmed was difficult as Ahmed did not want to leave Delhi. However, giving a freehand to Iqbal might have long term negative consequences. Karim was confused about the future of course of actions.

5. Karim sought the help of five consultants, who give the following opinions:

I. Organic vegetables might be a big success at Hauz Khas but awareness about organic vegetables is low among Ambala customers.

II. The Hauz Khas model can be implemented in Ambala provided the business is prepared to face the consequences.

III. Many high end restaurants in Ambala use organic vegetables. So, using organic vegetables will not be a differentiating factor.

IV. Selling prices of their dishes in Ambala are significantly lower. Using organic vegetables will bring down profits.

V. Premium quality organic vegetables are not easily available in Ambala.

Which of the following set of options would support Iqbal’s argument of not using organic vegetables?

a) I, III, IV

b) II, IV, V

c) I, III, IV, V

d) II, III, IV, V

e) All of the above

6. Karim sought feedback from a few of his businessmen friends, who were familiar with both the branches. Here is what they said:

— Businessman 1: Customers of Hauz Khas and Ambala are very different.

— Businessman 2: Customers in Ambala are extremely happy with Iqbal’s behaviour.

— Businessman 3: Ambala branch does not use the same quality of ingredients but maintains good hygiene and taste.

— Businessman 4: Who knows, tomorrow the customers of Ambala might also appreciate what Hauz Khas customers appreciate today!

If Karim thinks all these are valid concerns, which of the following actions would be best for the business?

a) Training Ahmed to replace Iqbal in a few months.

c) Bringing Iqbal to Hauz Khas branch.

d) Naming the Ambala branch as ‘Rain’s’, and changing it back to Mo1zan when needed.

e) Asking Ahmed to run the Ambala branch.

7. After discussing with a few customers, Karim realized that compromising on the quality of ingredients at Ambala branch may not be good idea but at the same time he also realized that Ambala branch had grown fast. He was contemplating following five actions. Which of the following actions would be the best for the future of his business?

a) Creating awareness campaign for organic vegetables in Ambala.

b) Karim himself should take after the Ambala branch.

c) Close down the Ambala branch.

d) Send Ahmed to Ambala branch and bring Iqbal to Hauz Khas permanently.

e) Hire a new person to run the Ambala branch.

Direction (8-10): Read the following case-let and choose the best alternative for the questions that follow:

Dilip Sanghvi was the head of a pharmaceutical company that was trying to develop a new product. Sanghvi, along with his friend Sudhir Valia, assessed that such products had mixed success. Sanghvi and Valia realized that if a new product (a medicine) was a success, it may result in sales of 100 crores but if it is unsuccessful, the sales may be only 20 crores. They further assessed that a new medicine was likely to be successful 50% of times. Cost of launching the new medicine was likely to be 50 crores.

8. How much profit can the company expect to earn if it launches the new medicine (suppose there are no additional costs)?

a) 12 crores

b) 10 crores

c) 10.5 crores

d) 11 crores

e) 11.5 crores

9. If the product is launched after favorable test marketing results, how much profit can the company expect to make (Assume there are no additional costs)?

a) 11.5 crores

b) 10 crores

c) 8.5 crores

d) 13.8 crores

e) None of the above

10. What is the probability of product failure if Sanghvi and Valia decide to test market it?

a) 0.21

b) 0.35

c) 0.14

d) 0.28

e) Cannot be computed

1. (c), 2. (b), 3. (c), 4. (c), 5. (c), 6. (d), 7. (b), 8. (b), 9. (e), 10. (b)

Explanations:

Explanation for (1 – 4):

 Show No. Play Name Timings 1 The Adams Family 9:00 am to 10:00 am 2 Footloose 10:00 am to 11:00 am 3 Cinderella 11:00 am to 11:30 am 4 Breakfast at Tiffany’s 11:30 am to 12:30 pm Lunch Break 12:30 pm to 1:30 pm 5 The Wizard of Oz 1:30pm to 2:00 pm 6 The Phantom of the Opera 2:00 pm to 3:00 pm

Explanation 5:

The question stem asks for the set of options that would support Iqbal’s argument of “not” using organic vegetables. All the options except II strongly support Iqbal’s argument stating the drawbacks of using organic vegetables in Ambala.

Statement II does not support Iqbal’s argument as it says “provided the business is prepared to face the consequences”; from this, one cannot ascertain whether the consequences will turn out bad and in favour of not using organic vegetables.

So, eliminate options 1, 2, 4 and 5.

Explanation 6:

It can be inferred from the businessmen’s statements that none of them has any harsh or strong opinion about Iqbal’s approach of not using organic vegetables.

Thus, according to the businessmen, substituting organic vegetables at the Ambala branch is not required.

Options 1 and 5 would unnecessarily complicate things as Ahmed would take more tune to get himself acquainted to the Ambala branch, also it is not guaranteed that it would yield the desired results for Karim. Eliminate options 1 and 5.

The passage states that giving a free hand to Rain might have long term negative consequences. However, option 2 doesn’t take this into consideration. Eliminate option 2.

Iqbal has already established the Ambala branch and he is the ideal person to carry out future operations there. Bringing him back to Hauz Khas will complicate things and serve no purpose. Eliminate option 3.

If the name of the Ambala branch is changed to ‘Iqbal’s’ instead of ‘Karim’s’, then the identity of the business in Ambala will be linked to Rain. Thus, option 4 satisfies all the opinions expressed by the four businessmen.

Explanation 7:

If an awareness campaign related to organic vegetables is generated in Ambala it can malign the reputation of the Ambala branch as it was previously not using organic vegetables.

As Karim is an experienced person and is the one responsible for taking the Hauz Khas branch to where it is today, he is the best candidate to run the Ambala branch as he is likely to generate the required sales whilst also maintaining the quality of food.

Closing down the Ambala branch would be a silly idea, as the place is already established and generates revenue.

Sending Ahmed to the Ambala branch is a bad idea as he would take more time to get himself acquainted to the place. Karim has already established the place and is the better person between the two brothers to carry out the operations there.

Option 5 can be eliminated for the same reason presented above to eliminate option.

Explanation 8:

Sales of the company if it launches the new medicine =

0.5(100) + 0.5(20) = 50 + 10 = Rs. 60 crores

Cost of launching the new medicine = Rs. 50 crores

Therefore, profit that the company can expect to earn =

60 - 50 = Rs. 10 crores.

Now, Sanghvi and Valia were in a quandary whether the company should go ahead and market the medicine. They contacted Sailesh Desai, a common friend for advice. Desai was of the opinion that given the risky nature of launch, it may be a better idea to test the market. Valia and Sanghvi realized test marketing would cost 10 crores. Desai told them the previous test marketing results have been favorable 70% of times and success rate of products favorably tested was 80%. Further, when test marketing results were unfavorable; the products have been successful 30% of the times.

Explanation 9:

Sales if the product is successful = 0.8(100) = 80 crores

Sales if the product is unsuccessful = 0.2(20) = 4 crores

Total expected sales = 80 + 4 = Rs. 84 crores

Cost of launching the product = Rs. 50 crores

Cost of test marketing = Rs. 10 crores

Expected profit of the company if the product is launched after favorable marketing conditions

= 84 - 60 = Rs. 24 crores.

Explanation10:

Probability of product failure if the test marketing results were favourable = (0.7) (0.2) = 0.14

Probability of product failure if the test marketing results were unfavorable = (0.3) (0.7) = 0.21

Probability of product failure if it was test marketed

= 0.14 + 0.21 = 0.35