Caselet -1 Decision Making | Previous Year Papers – XAT 2016

Analyse the following caselet and answer the questions follow:

Kamal Chinnappa, Vimal Rao, Ganesh Krishnan and Dinesh Kumar own a salon each on Barbil street. They are the only hairdressers on that street. Each of them offered three services viz. haircut, shaving and hair-dye. One evening, all four met in a nearby tea stall and agreed to charge Rs. 100 for any of the three services (haircut, shave and hair-dye) on weekdays. They also agreed to increase this rate to Rs. 115 on weekends and holidays. All verbally decided to implement the agreement.

Q1: The following day Kamal, being the most competent hairdresser on the street, was contemplating charging a higher than the agreed-upon price.

Which of the following would enable him to charge more with minimal violation of the agreement?

A. He should introduce a new and specialised service at Rs. 130.
B. He should open another shop on the same street and charge Rs. 150.
C. He should charge Rs. 130 for those wanting to jump the queue.
D. He should charge Rs. 115 for a service to a particular customer and give the next service free.
E. He should open his shop two hours before others and close it two hours after.

In the case of option B, he violates the agreement cause the agreement was between people and not the shops.

In the case of option C and option E, charging more for jumping the queue and extending the working hours may increase revenue but will not enable him to showcase his competence hence his objective will not be fulfilled.

Option D is incorrect because giving free service violates the agreement.

The agreement is for three services, so he cannot charge more for them. But for any new service, he can charge more. Hence option A is the correct answer.

Q2: Vimal relies heavily on a bunch of loyal customers. He is concerned about retaining them.

Which of the following options should he choose if he does not want to violate the agreement?

A. He should charge differential rates for loyal customers.
B. He should charge the loyal customers lower.
C. He should make every third visit free for his loyal customers.
D. He should charge all the agreed upon prices.
E. He should allow his loyal customers to jump the queue.

Option A, B and C will end in violation of the agreement.

Option D does not violate the agreement but does not solve the problem of retaining loyal customers.

Option E is the correct answer where the customers get a preference but pay the same amount.

» Caselet -2 Decision Making | Previous Year Papers – XAT 2016