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XAT 2018 Decision Making Preparation

Last Updated - October 12, 2017

Decision Making is the most important and scoring section of XAT. Number of questions asked generally varies from 20 to 25. This section tests the decision making ability of candidates. Questions in decision making involve a situation like a case let and candidate is expected to find the solution and also the reason behind that situation. This section requires logical understanding of different situations. First Questions on Decision making were asked in Analytical Reasoning, but from 2012 onwards it is an separate section which accounts for - Calculation of percentile; Calculation of sectional XAT cut off Shortlisting of candidates for GDPI.


Following is the number of questions asked from this section in recent years-

SectionNo of Questions in XAT 2015No of Questions in XAT 2014No of questions in XAT 2013
Decision Making232425


Type of Questions asked

This section consists of passages with certain information which is followed by a set of 4-5 questions. Each of the questions is again followed by 4-5 decision making answer options. These passages contain behavioral and mathematical decision making questions.


In behavioral type questions of decision making section you will get a scenario in which the protagonist is in a dilemma, and you are supposed to choose the best possible decision for him/her. Generally, situations are from backgrounds, such as Management, Manufacturing, IT, Politics etc.

The mathematical decision making questions are easy. In these type questions you may find DI or mathematical reasoning sets. However it is time consuming.

Attempting 15 to 18 questions in 45 minutes is sufficient. Although the sectional cutoff for this section generally varies 9 to 12 questions.

Example of Questions

Answer question 1-2 based on information that is provided.

Saral Co. is operating in seven north-eastern states of the country. The organization has a history of participative decision making, wherein people deliberate openly about pros and cons of every important decision, and a broad consensus is taken before taking the final decision. In Saral Co. every employee gets a salary proportional to the sales achieved. A new General Manager (GM) joined during the beginning of this month and challenged the organization's sole focus on sales to determine salaries. He urged the top management to include two more additional parameters in determining the salaries of the employees, viz. collection of information about competitors and the quality of relationship with the retailers


Ques. Manohar, the highest earning employee for the last three years, vehemently opposes the GM's proposal. Which of the following could be most likely reason for him to oppose the proposal?

A. He considers the proposal as a serious threat to his favorable position in Saral Co.

B. He is not interested in collecting the information regarding competitors.

C. No clarity regarding the relative importance of the three parameters.

D. He is not interested in maintaining quality relationship with retailers.

E. He may need to work harder to earn the highest salary.

Ques. The top management of Saral Co. refused to implement the proposal of new GM from the beginning of next month. Which of the following could be the most justified reason for the management's refusal?

A. To ensure that no manager will get credit for a major change soon after joining.

B. To avoid attracting criticism for their failure to implement a similar scheme.

C. His past experience is limited to seven northeastern states only.

D. The GM is new to the organization and he would require some time to implement the new plan.

E. The top management would need time to deliberate and get consensus.

Read the following case-let and answer the question nos. (1-4) that follow

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.


Ques. 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

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 favorable 70% of times and success rate of products favorably tested was 80%. Further, when test marketing results were unfavorable; the products have been successful 30% of the times.


Ques. How much profit can the company expect to make if the product is launched after favorable 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

Ques. What is the probability of product failure if Reddy and Rao decides to test market it?

A. 0.21

B. 0.35

C. 0.14

D. 0.28

E. Cannot be computed

Ques. If Rao and Reddy decides to launch the product despite unfavorable 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

How to approach right choice

The first and foremost thing is to read and understand the given data, facts, information in the passage. It is advised to go through the information with an open mind and read it attentively. One thing you should remember while solving DM section is that always go with the most ethical choice. It doesn’t matter whether you have an experience in the field or not, whenever you have confusion between two choices, one giving you materialistic benefits and other being the right thing to do, without a shred of the doubt go with the option of the right thing to do.


In most of the questions, you will get an option wherein, the protagonist is not doing anything. This is the option you should out rightly reject. No action in any situation is the worst possible decision.  Eliminating this option would definitely give you with possible options.

Preparation Strategy

The best possible way to improve yourself in the DM section is to solve as many mock papers as possible, preferably previous years XAT papers. However, while solving, don’t just understand why given answer key is correct; this may work in verbal section but in DM analyze why other three options are incorrect! What is the rationale behind not choosing other three options? This strategy will improve your understanding of DM section.




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