26 questions in the pattern of XAT. Each question is marked with the exams it suits. Answer it, then open the step-by-step solution.
Q1DM · Situation-Based DecisionsXAT
A manufacturing company can save ₹50 lakh a year by moving waste disposal to a cheaper contractor. The new contractor's licence is valid, but local people say it dumps waste in a nearby river. What should the company do?
Solution
A valid licence does not prove good practice, and the company can still be responsible for its waste. Checking the complaint and making proper disposal a contract condition protects the river and the company. The other options either ignore a serious allegation or are clearly illegal.
Answer: (B) Check the contractor's disposal sites and records before deciding, and make proper disposal a condition of the contract
Q2DM · Situation-Based DecisionsXAT
Aditi is a junior auditor. While checking accounts, she notices that a payment of ₹4 lakh has been made to a company owned by the client's finance head's brother, with no proper documents. Her senior says, 'Ignore it, the amount is small for this client.' What should Aditi do?
Solution
A related-party payment without documents is a genuine audit concern regardless of size. Recording it and escalating through the proper channel is her duty. Ignoring it is wrong; confronting the client herself or going to the media skips the proper process; resigning does not address the issue.
Answer: (B) Record the finding with evidence, explain her concern to her senior again, and if needed raise it with the audit partner
Q3DM · Situation-Based DecisionsXAT
A restaurant manager notices that a waiter is giving free desserts to his friends. The amount is small. Other waiters know about it. What should the manager do?
Solution
Small leaks become a culture when others see them go unchecked. A private conversation plus a general reminder fixes the behaviour without humiliating anyone. Ignoring it encourages others; a heavy penalty or public dismissal is out of proportion for a first instance.
Answer: (E) Speak to the waiter privately, make clear it must stop, and remind all staff of the policy on free items
Q4DM · Situation-Based DecisionsXAT
Meena, a branch manager at a bank, learns that a long-time customer, a retired teacher, is about to transfer her life savings to an unknown 'investment agent' who promises 40% returns in six months. The customer is calm and insists the decision is hers. What should Meena do?
Solution
The customer has the right to decide, but the bank has a duty of care. Explaining the risk and suggesting verification protects her without taking away her choice. Refusing or secretly delaying overrides her rights; staying silent ignores clear warning signs; reporting the customer herself to the police is misdirected.
Answer: (A) Explain the warning signs of investment fraud, suggest she verify the agent with the regulator, and offer to talk to a family member she trusts, while processing the request only if she still wishes
Q5DM · Situation-Based DecisionsXAT
Kavya has two job offers: one from a large firm with a higher salary in another city, and one from a growing local firm with a lower salary where she would lead a small team. She wants to build leadership skills. Her parents prefer she stays in the same city. What should she do?
Solution
This is a personal decision where her stated goal matters most, and her parents' view deserves a fair hearing. Deciding on salary alone or parents' wish alone ignores her own goal; rejecting both throws away two good options; asking firms to match each other is unrealistic.
Answer: (E) Weigh the offers against her own goal of building leadership, discuss the trade-offs with her parents, and then decide
Q6DM · Situation-Based DecisionsXAT
A family-owned spice company finds that one batch already sent to shops may contain a harmless but undeclared allergen (traces of peanut). Recalling it will cost ₹8 lakh. What is the right decision?
Solution
Peanut traces are dangerous for people with allergies, and they cannot avoid what is not declared. A clear recall protects customers and long-term trust. The other options accept a known risk to some customers to save money.
Answer: (D) Recall the batch, inform shops and customers clearly, and fix the labelling process
Q7DM · Situation-Based DecisionsXAT
A cab-aggregator company finds that drivers in one city are refusing short trips, and customers are complaining. Drivers say short trips do not pay enough after fuel costs. What should the company do?
Solution
Both sides have a real concern. Fixing the earnings problem for short trips removes the cause, and penalties for unfair refusals protect customers. A ban punishes without fixing the cause; ignoring or stopping short trips loses customers; a large across-the-board rise is unnecessary.
Answer: (C) Study trip earnings, and introduce a minimum fare or a small bonus for short trips, while keeping penalties for unfair refusals
Q8DM · Situation-Based DecisionsXAT
A college canteen contractor has been serving food that several students say is stale. The contract has eight months left. The students' council has asked the principal to act. What is the most appropriate first step for the principal?
Solution
The complaint needs to be checked and fixed quickly. Inspections give evidence; a written notice with standards and a deadline is fair to the contractor and protects students. Cancelling without checking may be unfair and legally risky; the other options either ignore students' health or avoid the problem.
Answer: (B) Arrange surprise food-quality inspections with a student representative, and issue a written notice to the contractor with clear standards and a deadline
Q9DM · Situation-Based DecisionsXAT
An e-commerce start-up's data team finds that a customer database was briefly open to the internet for six hours. There is no proof anyone accessed it. What should the company do?
Solution
Customer data was exposed; even without proof of misuse, the company must investigate and follow legal reporting duties. Silence, deleting evidence, waiting for complaints or shifting blame are irresponsible and may break the law.
Answer: (E) Close the gap, investigate access logs, inform affected customers and the authorities as required by law, and fix the process
Q10DM · Situation-Based DecisionsXAT
A coaching institute finds that its advertisement claims '100% selection' when actually 62% of students were selected last year. A competitor has pointed this out. What should the director do?
Solution
The claim is false and misleads students and parents. Withdrawing it and stating the true result is honest and protects long-term reputation. The other options keep misleading people or shift attention.
Answer: (D) Withdraw the advertisement, publish the correct figure, and check all other claims
Q11DM · Situation-Based DecisionsXAT
A village panchayat has funds to dig one new borewell. Two hamlets want it: Hamlet A (120 families) has a working well 2 km away; Hamlet B (60 families) has no water source within 5 km. What should the panchayat decide?
Solution
Need, not just numbers, should decide basic services. Hamlet B has no water within 5 km, while Hamlet A has a working source. Placing it halfway serves neither well; lots ignore need; waiting leaves Hamlet B without water.
Answer: (D) Dig the borewell in Hamlet B, since it has no nearby water source, and plan improvements for Hamlet A next
Q12DM · Situation-Based DecisionsXAT
A residential society's committee has ₹6 lakh left in its fund. Options: repaint the building, install CCTV after three thefts this year, or keep the money for emergencies. Residents are divided. What should the committee do?
Solution
Security after repeated thefts is the most urgent need, and keeping a reserve for emergencies is prudent. Repainting can wait. Waiting for complete agreement may mean nothing gets done; a festival or refund ignores the actual needs.
Answer: (C) Install CCTV to address the thefts, keep part of the money for emergencies, and plan repainting when funds allow
Q13DM · Situation-Based DecisionsXAT
The owner of a family-run textile shop wants to start selling online. His son is keen to manage the website; his daughter, who has completed a digital marketing course, is also interested. The two do not get along. What should the father do?
Solution
Using both children's strengths with separate responsibilities and common goals reduces conflict and gets the most out of the family's skills. Giving it to one child ignores the other's skills; dropping the plan wastes an opportunity; an outside agency adds cost and sidelines interested family members; a competition is likely to worsen the conflict.
Answer: (E) Give each a clearly defined role, for example the son runs the website and orders while the daughter handles marketing, with shared monthly targets
Q14DM · Situation-Based DecisionsXAT
A municipal officer has to choose between two projects with the same budget: repairing a bridge that engineers have marked unsafe, or building a new park that a large group of residents has requested. Only one can be done this year. What should she choose?
Solution
Public safety comes first when a structure is marked unsafe. Explaining the reason and planning the park keeps residents informed and hopeful. Splitting the money completes neither; postponing ignores the danger; a vote should not override an expert safety finding.
Answer: (A) Repair the bridge, explain the safety reason to residents, and plan the park for the next budget
Q15DM · Situation-Based DecisionsXAT
Rahul manages a retail store. On a busy festival day, a customer is accidentally overcharged ₹500 by a new cashier. The customer is angry and has posted about it on social media. What should Rahul do?
Solution
The store made the mistake. A quick apology and refund fixes it for the customer, and training prevents a repeat. Conditions on the refund, public excuses or ignoring it make things worse; firing a new employee for a first, honest error is excessive.
Answer: (B) Contact the customer, apologise, refund the ₹500, and retrain the cashier on billing
Q16DM · Situation-Based DecisionsXAT
A small bakery in Pune gets a bulk order for 500 cakes for a wedding, due in three days. Its usual capacity is 120 cakes a day. The owner can hire two temporary bakers, but quality may suffer. What is the best decision?
Solution
Three days at 120 cakes gives only 360, so extra help is needed. Accepting with supervision and an agreed quality check keeps both the business and the bakery's reputation. Rejecting loses a large order that can be managed; hiring without checks risks quality; short delivery without telling is dishonest; asking to move a wedding is unrealistic.
Answer: (E) Accept the order after checking that the extra bakers can work under a trained baker's supervision, and agree a quality check with the customer
Q17DM · Situation-Based DecisionsXAT
Ritu, a new team leader in a software firm, finds that a senior colleague, Arun, regularly leaves the office two hours early but marks a full day in the attendance system. Arun is well liked and his work is usually delivered on time. Two juniors have started doing the same. What should Ritu do first?
Solution
The issue is misreporting, and it is spreading. A private conversation addresses the problem directly, gives a respected senior a chance to correct himself, and sets the standard for the juniors. Reporting straight to HR skips a reasonable first step; ignoring it lets the problem grow; a team-wide threat hurts trust without naming the issue; copying it is clearly wrong.
Answer: (A) Speak to Arun privately, explain that attendance must reflect actual hours, and ask him to correct it from now on
Q18DM · Situation-Based DecisionsXAT
A farmer producer company has a contract to sell its tomatoes to a food processor at ₹12 a kg. The market price suddenly rises to ₹25 a kg. Some members want to sell in the market instead. What should the company do?
Solution
A contract is a commitment; breaking it damages trust and future business (the processor may have stood by them when prices were low). Negotiating a fair adjustment for the future is the right way to handle price swings. The other options break the contract or act in bad faith.
Answer: (E) Honour the contract, and discuss a price-adjustment clause with the processor for future contracts
Q19DM · Situation-Based DecisionsXAT
Sanjay, a project manager, discovers two days before delivery that a module his team built has a bug that may occasionally miscalculate invoices for the client. Fixing it will delay delivery by a week, which may cost his company a penalty. What should Sanjay do?
Solution
A bug that miscalculates invoices can hurt the client's finances and trust. Being open, with a plan that limits the delay, is honest and protects the relationship. Hiding it or fixing it quietly is unethical; blaming the client is dishonest; pushing the team to exhaustion without telling the client risks both quality and trust.
Answer: (E) Inform the client about the bug and the expected fix date, and propose delivering the rest on time while the fix is completed
Q20DM · Situation-Based DecisionsXAT
Priya runs a five-member start-up. Her best developer has received an offer with a 40% higher salary from a large company. The start-up cannot match it now but expects funding in four months. What should Priya do?
Solution
Honesty plus a concrete, realistic offer gives him a fair choice and keeps trust. Promising what cannot be paid is dishonest; guilt-tripping is unfair; not talking at all loses a chance to keep him; cutting others' pay damages the whole team.
Answer: (B) Be honest about the finances, offer a smaller raise now with a clear, written review once funding arrives, and discuss what else matters to him
Q21DM · Situation-Based DecisionsXAT
Vikram, a sales executive, is offered an expensive gift by a supplier just before his company decides on a new vendor. Company policy allows gifts below ₹1,000; this one is worth about ₹15,000. What should Vikram do?
Solution
The gift is far above the policy limit and is offered at a sensitive time. Declining and informing the manager follows policy and keeps the process clean. Accepting in any form, or keeping it secret, creates a conflict of interest; punishing the supplier in return is also unfair.
Answer: (C) Politely decline the gift and inform his manager that it was offered
Q22DM · Situation-Based DecisionsXAT
In a hospital, a nurse notices that a senior doctor has written a dose that is ten times the usual amount for a child. The doctor is known to be short-tempered and is busy in surgery. What should the nurse do?
Solution
A possible tenfold error in a child's dose is a patient-safety risk. The nurse should not give it until it is confirmed, but she also should not change a prescription on her own. Checking with the doctor or another doctor on duty is the safe, correct route.
Answer: (E) Hold the dose, and check the prescription with the doctor or another doctor on duty before giving it
Q23DM · Situation-Based DecisionsXAT
Neha leads a team of five. One member, Kunal, has missed three deadlines in a month. In the past he was one of the best performers. What should Neha do first?
Solution
A sudden drop in a good performer often has a cause (workload, health, family). A private conversation finds it and sets clear expectations. A formal warning first is harsh; moving work silently or discussing him publicly damages trust; ignoring it lets the problem continue.
Answer: (E) Talk to Kunal privately to understand what has changed, and agree on support and clear deadlines
Q24DM · Situation-Based DecisionsXAT
The HR head of a company receives an anonymous complaint that a manager makes inappropriate comments to women employees. There is no named complainant. What should the HR head do?
Solution
Anonymous complaints about harassment still need to be looked into, carefully and confidentially, because victims often fear speaking up. Ignoring it, punishing without inquiry, public confrontation, or demanding named complaints are all inappropriate.
Answer: (D) Start a confidential inquiry as per the company's policy, speaking to team members, and protect anyone who comes forward
Q25DM · Situation-Based DecisionsXAT
A school principal finds that a Class 10 teacher has been giving extra marks to students who join his private tuition. Parents of other students have complained. What should the principal do?
Solution
The complaint must be checked before acting; if it is true, the unfair marks must be corrected and rules applied. Silencing parents ignores the issue; stopping tuition without correcting marks leaves students wronged; dismissal without checking is unfair; the last option makes the wrong practice universal.
Answer: (E) Re-check the marked papers with another teacher, and if the complaint is true, take action as per school rules and correct the marks
Q26DM · Situation-Based DecisionsXAT
Arjun, a team leader, is asked by his manager to choose one team member for a high-profile assignment abroad. The best-suited person is Sana, but she has a young child; Arjun assumes she will refuse. What should Arjun do?
Solution
Assuming what Sana would want is unfair and can hold back her career. Offering her the opportunity with full information lets her make her own decision. The other options decide for her or pick on a basis other than suitability.
Answer: (E) Offer the assignment to Sana with full details, and let her decide
These are original practice questions written by Target Campus in the pattern and difficulty of MAH MBA CET, NMAT, SNAP and other MBA entrance tests. They are not previous-year papers.
Preparing for MAH CET, SNAP or NMAT? Courses, live classes and mocks by Dr. Kiran Derle at Target Campus.
