Question

Directions: In the question below is given a statement followed by two courses of action numbered I and II. You have to assume everything in the statement to be true and on the basis of the information given in the statement, decide which of the suggested course of action logically follow(s) for pursuing.

Statement: Due to the cancellation of a huge export order for not honoring the time frame, the company is left with the finished goods of the order and would incur a loss if they are not sold.

Courses of Action:

I. Company must buy extra time from the client.

II. The finished goods by the company should be sold to some other client.

1. Only I follows.
2. Only II follows.
3. Both I and II follow.
4. None of the above follow.

Answer 1

Correct Answer - Option 2 : Only II follows.

Option 2. Only II follows.

The statement suggests that a company's order gets canceled because of its inability in adhering to the time frame.

Course of action I suggests that the company must push the client to give it some extra time. This is illogical when an order is placed specifications regarding quantity, time, etc are made and if a company negotiates after the order gets canceled it mars its reputation further. Therefore, course of action I does not follow.

The second course of action suggests the company should look out for some other client and sell the finished goods to them to realize its cost. This appears logical. Therefore, course of action II follows.

Hence, option 2 is correct.