CAT 2018 Slot 2 DILR Question & Solution
Data Set
There are only four brands of entry level smartphones called Azra, Bysi, Cxqi, and Dipq in a country.
Details about their market share, unit selling price, and profitability (defined as the profit as a percentage of the revenue) for the year 2016 are given in the table below:
In 2017, sales volume of entry level smartphones grew by 40% as compared to that in 2016. Cxqi offered a 40% discount on its unit selling price in 2017, which resulted in a 15% increase in its market share. Each of the other three brands lost 5% market share. However, the profitability of Cxqi came down to half of its value in 2016. The unit selling prices of the other three brands and their profitability values remained the same in 2017 as they were in 2016.
Question 1
The brand that had the highest revenue in 2016 is:
Solution:
Let '100x' be the number of smartphones sold in year 2016.
Total revenue generated by Azra = 40x*15000 = Rs. 600000x
Total revenue generated by Bysi = 25x*20000 = Rs. 500000x
Total revenue generated by Cxqi = 15x*30000 = Rs. 450000x
Total revenue generated by Dipq = 20x*25000 = Rs. 500000x
We can see that revenue generated by Azra is the highest among all four brands. Hence, option C is the correct answer.
Question 2
The brand that had the highest profit in 2016 is:
Solution:
Let '100x' be the number of smartphones sold in year 2016.
Total revenue generated by Azra = 40x*15000 = Rs. 600000x
Profitability is defined as the profit as a percentage of the revenue. Therefore, profit generated by Azra = $\dfrac{10}{100}$*600000x = Rs. 60000x
Total revenue generated by Bysi = 25x*20000 = Rs. 500000x
Profit generated by Bysi = $\dfrac{30}{100}$*500000x = Rs. 150000x
Total revenue generated by Cxqi = 15x*30000 = Rs. 450000x
Profit generated by Cxqi = $\dfrac{40}{100}$*450000x = Rs. 180000x
Total revenue generated by Dipq = 20x*25000 = Rs. 500000x
Profit generated by Dipq = $\dfrac{30}{100}$*500000x = Rs. 150000x
We can see that profit generated by Cxqi is the highest among all four brands. Hence, option C is the correct answer.
Question 3
The brand that had the highest profit in 2017 is:
Solution:
Let '100x' be the number of smartphones sold in year 2016. Then the number of smartphones sold in 2017 = 1.4*100x = 140x
It is given that Cxqi offered a 40% discount on its unit selling price in 2017 i.e. selling price in 2017 = 0.6*30000 = Rs. 18000
Also Cxqi's merket share increased by 15% whereas the other three brands lost 5% market share.
Amount of profit generated by Azra = $\dfrac{10}{100}$*15000*49x = 73500x
Amount of profit generated by Bysi = $\dfrac{30}{100}$*20000*28x = 168000x
Amount of profit generated by Cxqi = $\dfrac{20}{100}$*18000*42x = 151200x
Amount of profit generated by Dipq = $\dfrac{30}{100}$*25000*21x = 157500x
We can see that brand Bysi generated maximum profit in year 2017. Hence, option A is the correct answer.
Question 4
The complete list of brands whose profits went up in 2017 from 2016 is:
Solution:
Let '100x' be the number of smartphones sold in year 2016.
Total revenue generated by Azra = 40x*15000 = Rs. 600000x
Profitability is defined as the profit as a percentage of the revenue. Therefore, profit generated by Azra = $\dfrac{10}{100}$*600000x = Rs. 60000x
Total revenue generated by Bysi = 25x*20000 = Rs. 500000x
Profit generated by Bysi = $\dfrac{30}{100}$*500000x = Rs. 150000x
Total revenue generated by Cxqi = 15x*30000 = Rs. 450000x
Profit generated by Cxqi = $\dfrac{40}{100}$*450000x = Rs. 180000x
Total revenue generated by Dipq = 20x*25000 = Rs. 500000x
Profit generated by Dipq = $\dfrac{30}{100}$*500000x = Rs. 150000x
It is given that the market sales increased by 40%. Therefore, the number of smartphones sold in 2017 = 1.4*100x = 140x
It is given that Cxqi offered a 40% discount on its unit selling price in 2017 i.e. selling price in 2017 = 0.6*30000 = Rs. 18000
Also Cxqi's merket share increased by 15% whereas the other three brands lost 5% market share.
Amount of profit generated by Azra = $\dfrac{10}{100}$*15000*49x = 73500x
Amount of profit generated by Bysi = $\dfrac{30}{100}$*20000*28x = 168000x
Amount of profit generated by Cxqi = $\dfrac{20}{100}$*18000*42x = 151200x
Amount of profit generated by Dipq = $\dfrac{30}{100}$*25000*21x = 157500x
We can see that profit of brands Azra, Bysi and Dipq increased in the year 2017 as compared to 2016. Hence, option A is the correct answer.