The previous year MBA (Master in Business Administration) program question of TANCET or Tamil Nadu Common Entrance Test exam conducted by Anna University is as follows:

ANALYSIS OF BUSINESS SITUATIONS
Directions : There are two passages in this section. Read each one; read also the directions for answering questions under the passage before answering.
Passage - 1 :
The Climax Corporation manufactured a line of major electrical appliances distributed through sixty wholesalers, many of which were company-owned. Retailers carried competitive lines, but wholesalers did not, portable appliances moved to market through nonexclusive distributors.
The company depended on wholesalers to provide service either directly or through, supervision of retailers' service departments. When the warranty was involved, the manufacturer supplied the parts and the wholesaler the labour. Retailers who performed the service function were given a larger discount than those who returned the goods to the wholesaler to fulfill the guarantee.
In 1980, home officials began questioning the adequacy of the service thus rendered either under the terms of the warranty or independently. Typical retailers carried several brands and in general did not have competent service personnel. The result was that the blame for the defect was passed back to the manufacturer. This, said the sales manager, was a major consideration.
Others believed that reduction of service costs would follow from centralizing the entire operation in the hands of a relatively few factory service branches or in carefully trained service personnel employed by a relatively few widely distributed wholesalers. Costs would be thus reduced, and at the same time, the quality of service rendered wound be enhanced, it was claimed.
The product service manager argued that more money should be spent on training retail sales service personnel. Retailers like to render service, he claimed, since it helps top bring traffic into their stores and thus is profitable. A third possibility explored was the promotion of good service by concerns who service but do not sell appliances.
During the conference, the rise of the discount house was discussed. It was thought to be a phenomenon partly based on the realization that good independent service can be secured in most markets and for most appliances. There may be an exception in the case of TV sets, it was admitted, since it is common to find great resentment as to quality of service and delay in meeting calls.
The subsequent discussion raised questions as to the validity of the policy of requiring the retailer to give free service time under the terms of the guarantee. Often owners expected to receive this service free, even though they had bought the appliances elsewhere. Some company officials believed that the company should pay dealers for their time costs when they enabled the company to make good on its guarantee. One executive pointed out, during a heated discussion on this point, that at least one major automobile company now paid its dealers for making repairs under the warranty.
About this time the sales manager read about a consumer survey that found that the average owner gave little thought to service availability when buying an appliance, except perhaps in the case of TV sets. But, when trouble arose the owner expected the maker to "stand behind his product" and not fall back on any excuse as to costs or time involved limitations which are found in the normal warranty
Climax's operations manager was given the responsibility to set up a task force which would study each of the alternatives discussed during the conference. The alternatives were to be examined with regard to customer service and cost. The task force was asked to make its recommendation directly to the service manager.
Two of the alternative methods for increasing service were almost immediately discarded as impractical. It was found that retail sales personnel would not have adequate time to devote to Servicing appliances. Investing capital in concerns which service but do not sell appliances might increase level of service, but Climax would have little if any control over their operation.
These concerns were independently owned and had no more allegiance to Climax than they did to any number of manufacturers whose appliances they serviced. Some concerns were highly reliable, but others had a record of spotty service. Weighed against other available alternatives, these options had few benefits to Climax.
It was the conclusion of the operations group that a choice had to be made among three options:
(1) factory service branches, (2) wholesaler service departments and (3) a combination of both factory and wholesaler service.
The factory service had number of advantages to Climax. Because Climax would provide the service at its own locations with company personnel, it could closely supervise the quality of the work done. Factory supervision of service was more difficult whenever the work was done by independent dealers. Moreover, under the factory system, Climax could ensure that service personnel undergo that most rigorous initial and refresher training programs. Another advantage of centralized factory service was that parts inventories would be minimized by storage in only a few service locations. Finally, under this system, Climax would determine the price of service, thereby ensuring- that consumers would not be overcharged.
The major disadvantages of centralized factory service was that Climax would have to invest in service -locations, provide parts inventories, and train personnel. Because of the size of this investment, few locations could be established.
Compared to factory service, wholesaler-operated locations would be more difficult to supervise.
As a result, the level of service was bound to vary from location to location. Even though the consumer survey indicated that service was not an important consideration in the pre-purchase decision as to whether to buy an appliance, poor service experienced by a customer might lower the chance that a Climax appliance would be bought again.
Wholesaler service would require less investment for Climax. Although Climax would have to take some of the responsibility for training wholesaler personnel, it would not have to invest in service locations nor in inventory parts. Initial investment and operating costs would not limit the number of service centres as it would be eager to offer the service as an added customer benefit.
Climax's investment would be even smaller if service facilities were maintained by independent, non-factory-owned wholesalers.
A final alternative was a combination of both factory service centres and wholesaler operated service departments. Under this option, wholesalers would be encouraged to offer service whenever possible, while Climax would maintain centralized service centres in areas where wholesaler service was inadequate or spotty.

Directions : The questions that follow relate to the preceding passage. Evaluate, in terms of the passage, each of the items given. Then select your answer from one of the following classifications.
1) A MAJOR OBJECTIVE in making the decision : one of the goals sought by the decision maker.
2) A MAJOR FACTOR in making the decision: an aspect of the problem, specifically mentioned in the passage, that fundamentally affects and /or determines the decision.
3) A MINOR FACTOR in making the decision: a less important element bearing on or affecting a Major Factor, rather than a Major Objective directly.
4) A MAJOR ASSUMPTION in making the decision: a projection or supposition arrived at by the decision maker before considering the factors and alternatives.
5) AN UNIMPORTANT ISSUE in making the decision: an item lacking significant impact on, or relationship to, the decision.

Attached Files

TANCET MBA Question Paper.pdf (150.3 KB, 80 views)