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XAT Decision Making Practice Series – #4

XAT Decision Making Practice Series – #4

Case 1 –

Q1. The main issues of interpretation arising from the work of professionally trained anthropologists are that they are late in colonial/post-colonial trajectories because professional training shapes their interpretations. However, within the field of interest and training, their works are most thorough and systematic.

The best conclusion drawn from the above paragraph is analogous to:
A. Heisenberg uncertainty principle, which states that speed and position cannot be determined simultaneously.
B. Cultural relativism, which states that two or more than two cultures cannot be compared.
C. Personal relativism, which states that one should not study anthropological phenomenon for personal gains.
D. Conclusive relativism, which states that anthropologists should not knowingly color their findings.
F. Communicative relativism, which states that anthropologists should not be selective in communicating their findings.

Case 2 – Krishna Reddy was the head of a pharmaceutical company that was trying to develop a new product. Reddy, along with his friend Prabhakar Rao, assessed that such products had mixed success. Reddy and Rao realized that if a new product (a drug) 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 drug was likely to be successful 50% of times. Cost of launching the new drug was likely to be 50 crores.

Q1. How much profit can the company expect to earn if it launches the new drug (suppose there are no additional costs)?
A. 12 crores
B. 10 crores
C. 10.5 crores
D. 11 crores
E. 11.5 crores

Q2. Now, Reddy and Rao were in a quandary whether the company should go ahead and market the drug. They contacted Raj Adduri, a common friend for advice. Adduri was of the opinion that given the risky nature of launch, it may be a better idea to test the market. Rao and Reddy realized test marketing would cost 10 crores. Adduri told them the previous test marketing results have been favourable 70% of times and success rate of products favourably tested was 80%. Further, when test marketing results were unfavourable; the products have been successful 30% of the times.

How much profit can the company expect to make if the product is launched after favourable test marketing results (assume there are no additional costs)?
A.11.5 crores
B.10 crores
C.8.5 crores
D.13.8 crores
E.6 crores

Q3. What is the probability of product failure if Reddy and Rao decide to test market it?
A. 0.21
B. 0.35
C. 0.14
D. 0.28
E. Cannot be computed

Q4. If Rao and Reddy decide to launch the product despite unfavourable test marketing, how much profit can the company expect to earn?
A. – 13.2 crores
B. -36.8 crores
C. -46.8 crores
D. -16 crores

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