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How to crack XAT Decision Making – Part III

This piece on Decision Making has really expanded and I hope as I begin to write this post that this will be the closing piece that concludes this and this.

SET 6: Information + Strategy Set

Answer questions on the basis of information given in the following case.

MBA entrance examination comprises two types of problems: formula-based problems and application-based problem. From the analysis of past data, Interesting School of Management (ISM) observes that students good at solving application-based problems are entrepreneurial in nature. Coaching institutes for MBA entrance exams train them to spot formula-based problems and answer them correctly, so as to obtain the required overall cut-off percentile. Thus students, in general, shy away from application-based problem and even those with entrepreneurial mind-set target formula-based problems.

Half of a mark is deducted for every wrong answer.

ISM wants more students with entrepreneurial mind-set in the next batch. To achieve this, ISM is considering following proposals:

I. Preparing a question paper of two parts, Parts A and Part B of duration of one hour each. Part A and Part B would consist of formula-based problems and application-based problems, respectively. After taking away Part A, Part B would be distributed. The qualifying cut-off percentile would be calculated on the combined scores of two parts.

II. Preparing a question paper comprising Part A and Part B. While Part A would comprise formula-based problems, Part B would comprise application-based problems, each having a separate qualifying cut-off percentile.

III. Assigning one mark for formula-based problems and two marks for application-based problems as an incentive for attempting application-based problems.

IV. Allotting one mark for formula-based problems and three marks for application-based problem, without mentioning this is the question paper.

Which of the following proposal (or combination of proposals) is likely to identify students with best entrepreneurial mind-set?

  1. II
  2. I & II
  3. I & III
  4. II & III
  5. II & IV

Just to reiterate, you should always start a DM question by listing the criteria as precisely as possible:

  • the test should be geared towards making aspirants attempt application-based questions

Please note that in the above question, defining the goal as selecting those with entrepreneurial skill will make it broader than necessary, it is the end and not the means. The case revolves around the means.

The next thing you need to remember, always go by elimination.

I & II revolve around cut-offs and III & IV revolve around the differential marking system.

So to maximise the chances of meeting the criteria it makes sense to choose one from each since you will be implementing two different things.

Between III & IV, the latter can be ruled out since there is no point if test-takers do not know about the differential-marking existing in the first place. They will spot the formula-based problems and do them. Entrepreneurs are those who pursue greater risk for the greater reward, the 3-mark application problems are the same — higher-risk with higher reward — but the reward should be known to the test-takers.

So III has to be there, reducing it to a choice between options 3 and 4 — I & III and II & III, which is nothing but a choice between I and II.

Between I and II it is better to choose II since it specifies sectional cut-offs. With overall cutoffs, test-takers with lower entrepreneurial ability can still sneak through on the basis of section 1 scores, violating the criteria. Hence, (4)


ISM conducts a common entrance examination every year. This year, the question paper would comprise 60 questions with an equal mix of formula-based problems and application-based problems. All questions would carry equal marks. Balaji is appearing for the examination. Before, appearing for the examination he gets the following information from coaching institutes:

I. Application-oriented problems take more time to solve in an examination hall.

II. Chances of silly mistakes would be low in application-based problems.

III. ISM would assist the students with bank loans to start a new venture.

IV. Options are generally confusing for formula-based problems.

V. ‘Practice makes a man perfect’ can apply only to formula-based problems.

VI. Students get very good campus jobs.

Based on the above information, which of the following options would help him to be better prepared for the examination?

  1. I &II
  2. I, II & V
  3. II, III & VI
  4. IV, V & VI
  5. I, II, IV & V

This is an easy one. As mentioned in the previous post it is best to go in with a one question at a time approach rather than one set at a time. So if the previous one seemed tricky it makes more sense not to attempt but to move on to the next one.

This one needs no explanation, III & VI are not related to the test preparation, whereas all the rest are, hence, (5).


SET 7: Information + Strategy Set

Answer questions on the basis of information given in the following case.

The Disciplinary Committee of Nation 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 his 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?

  1. Take no action against Mr.Loyal.
  2. Suspend Mr.Prodigal from the party with immediate effect.
  3. Expel Mr.Loyal from the party with immediate effect.
  4. Ban Mr.Loyal from entering party premises till completion of court proceedings.
  5. Initiate an internal inquiry to find the truth.

In all cases, questions brought in additional information. Hence do not define the situation and set criteria before reading the question.

This is an easy one, option (3) hurts both the most since the party will definitely get split if action is taken against Mr.Loyal who is not even an accused.


At the Disciplinary Committee meeting, members came up with the following suggestions. Which of the following suggestions would harm the party, the least?

  1. Maintain status-quo
  2. Expel Mr.Prodigal from the party with immediate effect to maintain the party’s clean image
  3. Initiate an internal inquiry to find the truth.
  4. Suspend Mr.Prodigal from the party with immediate effect but announce that he will be taken back if the court declares him innocent.
  5. Suspend both Mr.Loyal and Mr.Prodigal from the party with immediate effect.

The criteria, in this case,

  • the decision should not be too harsh on Mr.Loyal so that the party does not lose his support and split.
  • the decision should also show the party taking an action against the crime and not prevent the image of the party from being dented further.
  1. violates the second criteria
  2. does not fully satisfy the first criteria
  3. does not fully satisfy the second criteria
  4. satisfies both
  5. violates the first criteria

Mr.Opportunist, a veteran member of the NPP stakes his claim to be nominated as an NPP candidate in the upcoming election. Mr.Opportunist presented the following arguments in favour of his candidature to the NPP Executive Committee.

I. Mr.Loyal’s candidature in the upcoming election will adversely impact NPP’s chances. Hence, the party should not nominate him.

II. The party should call a press conference to disown Mr.Loyal. This would enhance the party’s image.

III. The party would not be able to take any strong disciplinary action against Mr.Loyal, if he gets re-elected.

IV. I have a lot of goodwill and significant followers in the constituency.

V. None of my close relatives is into active politics.

Which of the following combinations would best strengthen the claim of Mr.Opportunist?

  1. I & III
  2. I & IV
  3. II & III
  4. III & V
  5. IV & V

The criteria for this question

  • the party should benefit from Mr.Oppurtunist contesting the election as against Mr.Loyal

So any statement that shows Mr.Opputinist to be a better bet without jeopardising the party’s future should be considered.

(I) cites a strong reason for not fielding Mr.Loyal and hence would support Mr.Oppurtunist’s claim

(II) will jeopardise the party’s future since Mr.Loyal will have no option but to breakaway people and form his own party.

(III) makes Mr.Loyal the issue rather than his son who is the one who is accused of a crime.

(IV) cites a strong reason for fielding Mr.Oppurtunist

(V) serves no purpose

Hence, option (2).


The Disciplinary Committee has decided to suspend Mr.Loyal from the party because they felt he was influencing the judicial process. However, Mr.Loyal feels that the committee is biased and he is being framed. Now, elections have been announced. The last time. Mr.Loyal had won with a majority on account of his good work.

Which of the following options is most likely to resurrect Mr.Loyal’s immediate political career?

  1. The main opposition party has invited Mr.Loyal to join the party and contest the election, the chance of winning is high.
  2. Not participating in the campaign and instructing his followers to stay away from the campaigning process.
  3. Ask his followers to support the NPP nominated candidate and display his loyalty to NPP.
  4. Mr.Loyal should contest as an independent candidate. But because of a split in votes, his chances of winning would be low.
  5. Influence the nomination process through his followers within NPP, to get one of his close associates nominated.

The stakeholder is Mr.Loyal and the criteria for this question

  • turnaround/resurrect his immediate political career 

Options (2) will have no immediate effect.

Option (3) while a good strategic long-term move will not do anything for him in the short-run.

Option (4) is ruled out since chances of winning are low. 

Choosing between (1) & (5) is absolutely tricky since both of them seem to be things that will work out well for him.

The only hitch with (5) is that it is still an indirect route, it does not change the fact he is suspended, it does not ally his fears that he is being framed and sidelined. So while his close associate might get elected it does not secure his political future. 

Option (1) clearly favours him the most since he will get elected and nothing succeeds like success, especially in politics.

Remember, you are supposed to maximise chances for Mr.Loyal and not necessarily looking at a politically correct/moral/ethical solutions!

It is one of those questions that you can’t help attempting and you might go ahead and mark (3), picking up a negative but it highlights the need to follow the process of defining the stakeholder and listing criteria precisely.


SINGLE-QUESTION SET: Information + Strategy

Innovative Institute of Business (IIB) has decided to be the first green campus in India. IIB Administration has advised all campus residents to reduce carbon footprints. IIB faculty members did a brainstorming exercise and came up with the following suggestions:

I. Replacing electricity source for street lights with solar panels.

II. Replacing the existing buildings with environment-friendly buildings.

III. Organizing a seminar on ‘Towards a Sustainable Future’ involving all students, staff, and experts from around the country.

IV. Introducing a compulsory course on sustainability to increase awareness among students.

V. Conducting an initial energy audit to explore where IIB can reduce carbon footprints.

Which of the following options would be the most preferred sequence of actions to reduce carbon footprints on campus?

  1. II, IV, V
  2. IV, V, III
  3. V, I, II
  4. V, I, III
  5. V, III, I

The goal is very clearly defined — to reduce carbon footprints on campus — so evaluate each statement’s impact; also make it a point to rate the impact as direct or indirect.

I. Replacing electricity source for street lights with solar panels — direct, immediate impact

II. Replacing the existing buildings with environment-friendly buildings direct, immediate impact

III. Organizing a seminar on ‘Towards a Sustainable Future’ involving all students, staff, and experts from around the country — no impact on campus carbon footprint reduction

IV. Introducing a compulsory course on sustainability to increase awareness among students — no impact on campus carbon footprint reduction

V. Conducting an initial energy audit to explore where IIB can reduce carbon footprints — direct, immediate impact

All options with III and/or IV can be removed.

Hence, (3).


How to approach the Decision Making section

1. Choose 12-15 safe questions to attempt instead of sets

Over the course of the three posts we have seen how the difficulty level of a DM question can ascertained only after you read the question and all the 5 options. So choosing sets based on the outline of the case is not a wise idea since there is always additional information that comes with the question. Go in with this in mind and try to pick out 12-15 safe questions.

2. Accuracy can be really low if you do not follow the process

Decision making as we discussed earlier is unlike any other section you have done. You might mark an option and think it was absolutely right but if you arrived at that without following the process your chance of getting it right is no more than 20%. So if you want to ensure that your XLRI dream is realised then please follow the process for every question – define criteria and eliminate options — the shadow answer on CAT and criteria on XAT DM are the same, ignore to your own peril.

3. Always go by elimination instead of selection

The process outlined above is to define criteria and eliminate options that do meet criteria. The normal way of doing it would be to read all options without defining any criteria and looking to select an option. Do not do this. On decision making elimination is the only way to go. When in doubt, keep going back to read the case.

4. When still in doubt leave or mark for later

Given the amount of reading and the trickiness of the questions, you will be operating with very little margin for error. So even after following the process, you find yourself caught between two options, do not choose one randomly, mark it and come back later if you are unable to find enough questions to solve.  

Whenever we read a case we tend to miss or rather ignore a few sentences, when we come back to questions we tend to notice these sentences.

As we discussed earlier, XAT is there for the taking for those who take SimXATs the way they took SimCATs. The more focussed and better prepared will win out.

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