# Logical Reasoning - Course of Action - Discussion

Discussion Forum : Course of Action - Section 1 (Q.No. 3)
Directions to Solve

In each 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 courses of action logically follow(s) for pursuing.

• (A) If only I follows
• (B) If only II follows
• (C) If either I or II follows
• (D) If neither I nor II follows
• (E) If both I and II follow.

3.

Statement: Since its launching in 1981, Vayudoot has so far accumulated losses amounting to Rs 153 crore.

Courses of Action:

1. Vayudoot should be directed to reduce wasteful expenditure and to increase passenger fare.
2. An amount of about Rs 300 crore should be provided to Vayudoot to make the airliner economically viable.

Only I follows
Only II follows
Either I or II follows
Neither I nor II follows
Both I and II follow
Explanation:
Clearly, for better economic gain, losses should be reduced and income increased. So, only course I follows.
Discussion:
9 comments Page 1 of 1.

Benison said:   2 years ago
Answer should be D both are incorrect.

@All.

How are you so sure that increasing ticket fares will reduce the losses?

It may happen that by increasing the fares the customer may look for other company's flight tickets and like this by increasing the fares it may suffer more losses.
(1)

Shivangi said:   3 years ago
I think the answer should be D since increasing fares would not help attracting more customers. Passengers might resort to other airlines at cheaper rates. Thus, this would not achieve the purpose.
(2)

Tanisha said:   4 years ago
The correct answer should be D.

Increasing ticket fare may cause losses to increase as passengers may choose alternative airlines with cheaper tickets. As the question doesn't state the reason for Vayudoot's losses we cannot bring up any solutions. The best option is Vayudoot would be to set a special committee to analyse the reasons for their losses and discuss and implement solutions accordingly.
(1)

Tanmay chandak said:   6 years ago
I think the answer is D.

Based on the statement, we cannot deduce what Vyudoot really is. It can be a govt infra project or an airplane or some private company etc. Course of action cannot be taken on a major assumption that vayudoot is an airplane, although it is a verifiable fact.

John Lambe said:   9 years ago
Based on only the information given, one cannot deduce whether increasing fares would improve profitability. It might be losing money due to low passenger numbers, maybe because it is overpriced. In that case, the extra revenue per passenger might be outweighed by the further reduction in passenger numbers that would result from the price increase.

As for reducing wasteful expenditure, that is desirable, when possible, whether the company is profitable or not, but it is not logical to conclude solely from the information given, that there is wasteful expenditure.

Other possible causes of its lack of success could include a bad marketing strategy, or operating routes for which there is insufficient demand. (So the solution might be to actually increase spending on marketing, and/or cut routes).

A problem with some of these questions is that the goal of the action is not stated. Vayudoot might be a state-owned airline. (The reader should not be expected to know that since this question is not supposed to be a test of knowledge of airlines).

If so, there might be strategic reasons for the country to operate it at a loss (for example, it might benefit tourism).

So, it is necessary to know whether the goal is to improve profitability of Vayudoot, or to do what is best for the country's economy.

Increasing fare is not an alternative to mitigate losses. Option 1 should not be appropriate answer.
(2)

Increasing price is against the social welfare. How can it be answer 1 be right.
(1)