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Third Semester MBA Degree Examination, June/July 2015Strategic Management

Time: 3 hrs. Max. Marks:100

Note: 7. Answer any TIIREEfuII questionsfrom Q.No.7 to 6.2. Q.No. 7 and I are compulsory.

12MBA31

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a. What do you mean by strategic intent?b. Explain the different levels of strategy formulation.c. Discuss the strategic management process.

a. What is a strategic plan?b. Explain competence, core-competence and distinctive competence giving suitable

c. Explain Porter's five force model and its implication of Two-wheeler industry.

a. Define strategic group mapping. (03 Marks)b. Explain the value chain analysis of a firm. (07 Marks)c. Discuss the impact of environmental factors on the performance of a company. (10 Marks)

a. What is Bench Marking? (03 Marks)b. Explain the balanced score card approach of a firm. (07 Marks)c. Explain the five generic competitive strategies. (10 Marks)

a. What is strategic alliances? (03 Marks)b. What are the strategic options available for a firm to enter in foreign markets? (07 Marks)q. Explain BCG matrix for resource allocation. (10 Marks)

a. What do you mean by corporate social responsibility? (03 Marks)b. Explain the different types of control systems. (07 Marks)c. Critically evaluate the different tlpes of organaatronal structures and their relevance in

effective strategy implementation. (10 Marks)

Do a SWOT analysis of Kingfisher airlines. What strategies do you suggest for its survival?(10 Marks)

Think of a business and draw a busin'ess plan for the business you thougfu. (10 Marks)

I of 2

a.

b.

c.

12MBA31

CASE STUDY

Toyota Motor Company is widely regarcled as a low-cost producer among the World'sMotor Vehicle Market. Despite its ernphasis on product quality, low cost and ettcientsupply chain management, the company is finding hard to position their brand in lou,-costsegment, (rvhere Maruti-Suzuki is leader) in India. The Company's Brands'ETIOS andLiva' are picking up sales slowly. Where as the SUV 'Innova' is selling aggressively inIndia market.Now the company want to launch 'Camry' and 'Lexus' both are premium Luxury brands tocompete with German's Mercedes, BMW and Audi and capture Indian market successftllly.

Ouestions :

Illustrate some key success factors on which the Toyota company can become successfui inIndia. (06 Marks)What strategies do you suggest for the company to position their Etios and Liva brand inIndian market'/ (07 Marks)What strategies do you suggest to position the Camry and Lexus brands in premiumsegment? (07 Marks)

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USN

Time: 3 hrs.

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2015

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Operations Management ri,::

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Discuss the statement "Production is a means of creating utility" (03 Marks)Explain the recent trends in operations management ; i (07 Marks)XYZ Company is planning to add a new line of toys to its prafi#it-mix. This would requireleasing new equipment for a monthlypayment of Rs.6000 Jq{}ffile costs would be Rs.2 perunit and the toy would sell for Rs.7 per unit. ,*4,{_.loi) Determine how many toys must be sold in order to bfuak-even.it) Calculate the profit or loss that would occur.u,if 1000 toys are made and sold in a

month.iil) How many toys must be sold to make a profit of Rs.4000?

The sales o f a product for the last 10.*-e,# tb.'ufi

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are shown below:

Week I 2' a.,; J 4 5 6 7 8 9 l0Unit sales 700 724 720 728 740 742 7s8 750 770 77s

Determine the equation for the trend line and predict sales for the 11'h and 12th weeks.(07 Marks)

'Hotel Mubara-k' ,a fast food restaurant offers the following menu for its customers. The unitselling price, variable production cost and expected sales per day are shown in the tablebelow.

ltem Selline price/unit Variable cost/unit Expected dailv sales (units)A Rs.30 Rs.12 700B Rs.8 Rs.3 700C Rs.15 Rs.5 s00D Rs.7 Rs.4 500E Rs.3 Rs.2 300

State the elements of good forecasts

The fixed costs are Rs.20,000/- per day. Determine the break-down sales per day

What is facility location?What is time study? What are its objectives?Explain the factors affecting location decisions.

1 of3

4 a. Define the term "Master Production Scheduling".

b. State the primary and secondary objectives of materials management.

c. Calculate the vendor rating for the following: The item under considerationall suppliers:

12MBA32

(03 Marks)

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Weightage for quality - 70Yo; Price :20Yo and Delivery - l:07o. (10 Marks)

5 a. An auto industry purchases spark plugs at the rate of Rs.25 per piece. The annualconsumption of spark plug is 18,000 nos. If the ordering cost is Rs.250 per order andcarrying cost is 25% p.a., what would be the,EbQ? If the supplier of spark plugs offers adiscount of5% for order quantity o13666 nsS-lpdr order, do you accept the discount offer?

l,\." (10 Marks)

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Suooliers Data

Price of each itemDeliverv Dromised 6'weeks

Actual deliveries made in 6.2 weeks

6a.b.

C.

b. The following data is available*,-*f;t#onsumption pattern of certain materials in anorgantzation: 4r-)d

Group No. of ite'ilfs' Monthly consumption (units) Price item (Rs.)I 4A 300 90II 20 270 100

III 100 I 700 5

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VIII 30 t70 500

Find out A, B, C items when:'A' item account for 85o/o of consumption value.'B' item account for 10% of consumption value.'C' item account for 5o/o of consumption value.

What are the importance of aggregate plans?

Briefly explain the characteristics of service operations.

Explain the service facility layout for hospital service.

2 of 3

7a.

IZM.B.A32

A firm produces denim jeans incurs the following monthly costs to produce denim jeans.

Fixed cost : Rs. I ,00,000; variable cost/p.u _ Rs. 1 001-; sales volume _ 500;selling price : Rs.250 per unit. Determine the break-even-volume for the above data.

(05 Marks)

Determine the multifactor productivity for the combined input of labour, material, mashihetime and overhead expenses given below: .1,,...* ,i"Labour cost - Rs.1000/-; Materials cost - Rs.500/-; Machine cost - Rs.500/-;.'Overheadexpenses : Rs.2000/-, Output : 2000 units. (05 Marks)

average method. (05 Marks)

b.

c. The table below shows the monthly demand over 6 months period for a product.The weightage given for the demand for 6tn, 5th and 4th months are 0.5, 0.3 and 0 .2

respectively. Determine the forecast of demand for 7'h month using weighted moving

d. Choose any one product and draw aparticular product.

layout for manufacturing the(05 Marks)

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A company has to select one location out of fiVe alternatives considered for a new plant. Theannual operating costs and other intangible factors are given below for these five locations.

i) On the basis of annual operating factors, which site would you choose? (10 Marks)it) Devise a method of quantiffing the intangible factors and integrate them with the cost

data into the overall evaluation. Which is best now?

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Demand (units

diagram

FactorsLocations

A-,'%l B C D EEconomic factorsLabour cost (Rs.) f.;*0,ooo 1" 10.000 1,60,000 85,000 75,000Transportation cost(Rs.)

10,000 8,000 7,000 12,000 14,000

Local taxes (Rs.) 17,000 20,000 25,000 19,000 17,000Cost of power (Rs.) 2 1,000 29,000 25,000 18,000 23,000Other costs (Rs.) 16,000 I 1,000 12,000 16,000 18,000Intaneible'factorsCommunity attitude Very good Fair Good Fair Very goodf*bour availability Good Very good Fair Outstanding Acceptable,@ality oftransportation

Fair Acceptable Outstanding Acceptable Fair

Quality of line Acceptable Fair Good Very good outstanding

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(10 Marks)

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Define consumerism.What are the characteristics of Indian consumers?Explain consumer research paradigms.

What is black box in consumer behavior?Describe the levels of consumer decision making.Explain Nicosia model of consumer behavior.

What is perception?

,,,$"'"4 a. What are elements of consumer learning?

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b. Explain Tri-component model of attitu&,rc. Explain online buying process wfthie*$ffiple.

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Gonsumer Behaviour

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2. Q.No.7 and I are compulsory. ''-

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What are buying motives and explain the different types of buying motives? (07 Marks)Define perceived risk. What are the types of riskand explain how consumers handle risk.

5a.b.

c.

6a.b.

c.

What is social class? ,,.,,,.,,What is sub-culture? Explain thb different types of sub-culture.Explain the strategies to overcome cross-cultural problems.

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Differentiate betwpefL0RM and eCRM.How to measure;tHy*bpinion leadership ?What is adopfu?"Explain the different adopter categories.

7 a. Zee teldl#s expanded its operations in South India by introducing regional channels inTa1n&ckannada, Malayalam and Telugu under the Zee brnd name. It is segmenting itsmlt1Gt on the basis of socio-cultural variable, language. What is the importance ofsb.iio-cultural segmentation in a country like India, for such companies? (10 Marks)

b;'' Cellular service provider Airtel has launched Airtel friendz prepaid, which allows users to. form friends groups and talk to each other at economical rates. There is also a provision to'' transfer the recharge value to any member of the friends group. Marketers are aware of the

influence that friends can have on purchase decisions. Evaluate the importance of friends asa reference group in purchase decisions. (10 Marks)

8 The Harry Potter series of books created publishing history on account of its huge salesfigures. No other children's book's have ever sold more copies than these. A major factorattributed to the success of this series of the books is the buzz or hype generated by positiveword-o f- mouth cortmunicat ion.

. a. How do marketers benefit from positive word-of-mouth communication? (10 Marks)b. How is it possible to devise strategies to make a product the talk of the town? (10 Marks)

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Time: 3 hrs.

12MBAFM321

Max. Marks:100

Q.No.6.

Third Semester MBAAdvanced Financial Management

Note: l. Answer any TIIREE fall questions from Q.No.7 to2. Qaestion No. 7 & I are compulsory.

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a. What is concentration banking? (03 Marks)b. The annual cash requirement of A Ltd is ( 10 lakh. The company has marketable securities

in lot sizes of { 50,000, { 100,000, { 2,00,000, { 2,50,000 and { 5,00,000. Cost ofconversion of marketable security per lot is T 1,000. The company caw earn 5% yield onsecurities, you are required to prepare a table indicating which lot size will have to be soldby the company. Also show the economic lot size to be obtained by Baumol model.

(07 Marks)c. The following results are expected by xyz Ltd by quaters next year in thousand of rupees.

Particulars I 2 aJ 4

Sales

Cash payments :7500 10,500 18,000 10,500

Production cost 7,000 10,000 8,000 8,500Selling, administrative and other costs 1,000 2,000 2,900 1,600Purchase of plants and other fixed assets 100 1,100 2,100 2,r00

The debtors at the end of the quarter are Yr'd of sales for the quarter. The opening balance ofdebtors is T 30,00,000. Cash on hand at the beginning of the year is t 5,00,000. Borrowingsare made at the beginning of quarters in which multiplies of t 10,000 and are repaid at theend of quarters interest charges may be ignored. You are required to prepare i) Cash Budget

a. With the formulae, explain what working capital leverage is.

b. Explain the various sources of working capital.c. Define Merger, Explain the various types of mergers of motives behind merger.

by quarters for the year. ii) State loan outstanding at the end of the year.

Define EVA and explain its components.What are stock dividends and stock splits. Explain their rationale.Define industrial sickness. Explain the causes and symptoms of sickness.

repeat purchases. What is the expected pay off if the credit is granted?

(03 Marks)(07 Marks)(10 Marks)

(10 Marks)

(03 Marks)(07 Marks)(10 Marks)

a. What is an ageing schedule. (03 Marks)b. The financial manager of firm is wondering whether credit should be granted to a new

customer who expected to make repeat purchase on the basis of credit evaluation. Thefinancial manager feels that the probability that the customer will pay 0.70 and probabilitythat customer will default is 0.30. Once the customer pays for the first purchase, theprobability that he will pay for the repeat purchase will be 0.90. The revenue from the saleswill be { 2,00,000 of the cost of sale will be 160,000 - these figures apply to both initial and

(07 Marks)

12MBAFM321

c' Rakesh enterprise is currently providing 30 days credit to its customers. Its present ,u1., ur.t 200 million. Its cost of capitalis 12% of the ratio of variable cost to sales is 0.80. Rakeshenterprise is considering extending its credit period to 45 days which is likely to push salesup by < 60 million. The bad debt proportion on additional sales would be 15o/o. The tax rateis 33%. What will be effect of lengthening the credit period as residual income of the firm.

(10 Marks)

a. What is ROI - RoE analysis? (03 Marks)b. 'Precision Engg factory consumer 50,000 units of component per year. The ordering,

receiving and handling costs are { 3 per order while tracking cost are t 12 per order. Furtherdetails are as follows : deterioration and obsolescence cost T 0.004 per unit per year ; interestcost { 0.06 per unit per year ; storage cost t 1000 per year for 50,,000 units. Calculate EOQ.

(07 Marks)c. From the details given below, calculate ;

i) Reordering level ii) Minimum level iii) Maximum level iv) Danger level. Reorderquantity is to be calculated on the basis on the following :-cost of placing a purchase orders is ( 20 No. of units to be purchased during the year is5,000purchasedpriceperunitinclusiveoftransportationcostis<storage per unit is ( 5 Details of lead time: Average 10 days ; maximum 15 days minimum -6 days. For emergency purchase 4 days. Rae of consumption : Average : 15 units per daymaximum: 20 units per day. (10 Marks)

a. How is EFR computed? (03 Marks)b. In engineering company has a cost of equity capital of 10%. It earns 18% return an

investment. The companys earning is { 10 per share. According to Walters model whatshould be the price of shares at25o/o dividend payout ratio? Is it optimal ratio. If not what isthe market price at optimal ratio? (07 Marks)

c. R company belongs to a risk class whose capitalization rate is l0%.It currently has 1,00,000shares selling at { 100. The firm is contemplating the declaration of t 6 dividend at the endof the year. Answer the following questions based on MM model on the assumption thattaxes does not exist" Assuming that the firm has net income of T 10,00,000 and also paydividends. It makes investments of t 20 lakhs during the period. How many new shares mustbe issued. (10 Marks)

a. Define agency cost/problem and explain why frms incur them. How can it be reduced?(05 Marks)

b. what is the cost of trade for credit terms " %rnet 45". (05 Marks)c' In considering the most desirable capital structure of a comp dfly,the following estimates ofthe cost of debt and equity capital (after tax) have been made at various levels of debt -equity mix:

Debt as o/o of TotalCapital employed

Cost of debt (%) Cost of equity (%)

0 5.1 t2.0t0 5.0 t2.020 5.0 t2.s30 5.5 13.040 6.0 14.050 6.5 16.0

60 7.0 20.0

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l2MBAFM32T

You are required to calculate/determine optimal debt equity minimum by calculatingcomposite cost of capital. (10 Marks)

8 Compulsorya. A company currents operating income is ( 4 lakhs. The firm has ( 10 lakhs of I 0% debt

outstanding. Its cost of equity capital is estimated to be l5%.i) Determine the current value of the frm using traditional approach.ii) Calculate overall capitalisation rate as well as leverage ratio1) B/S 2)BlV 3) The firm is considering increasing its leverage by raising anadditional { 500,000 debt and using the proceeds to retire that amoun& of equity. As a resultof increased financial risk Ki is likely to go up to 12% and Ke is 18%: would yourecommend the plan. (15 Marks)

b. Give a critical approaisal of Modigliani - Muller approach to capital structure theory.(05 Marks)

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3 of3

USN MBAFM322112MBAB1332

Third Semester MBA Degree Examination, June/July 2015I nvest-.-nt Management

Time: 3 hrs. Max. Marks:l00

Note: 7. Answer any TIIREE full questions from QI to Q6. , , *"i-;*

2. Quesfion I7 and Q8 are compulsory. inn

3. (Jse of interestfactor table is permitted. n ::,,, -

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2a.b.c.

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What do you mean by 'Duration' of a bond?Differentiate between inve stment and speculation.What is CAPM? What are the assumptions of CAPM?

What is 'Investment'?How does fundamental analysis differ from technical anatf*EidExplain the clearing and settlement process followeffiNsE

is Rs. 100.

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(07 Marks)(10 Marks)

(03 Marks)(07 Marks)(10 Marks)

3 a. Define stock exchange. 1.1. r (03 Mffk6)b. A company is presently paying a dividend;i-fip4.5 per share. The beta value is 1.5. The

dividend is expected to grow at the rate otQtZ" pa. fo. many yeaxs to come. The risk freerate of return rs 7Yo pa and the ex r€turn on market porttoiio is l4"hpa. Compute theexpected refurn as the equity acco CAPM and calculate the value of the equity shareconsidering the expected return as required rate. (07 Marks)

(10 Marks)

(03 Marks)(07 Marks)

c. Explain the various factors of ,p&&a my Analysis'.

FH 5?;

What is 'Random walkvestment.

The expected stock x and y are 15% pa and 18% pa respectively. Their riskmeasured as ion are 4oh and 5% respectively. Correlation coefficient betweenxandyis+

return of equally weighted portfolio (R )the equally weighted portfolio risk (oo)the correlation coefficient necessary to reduce the level of portfolio risk by

(10 Marks)

(03 Marks)bW A Rs. 100/- face value bond with u .oupon rate of lz%pa matures after 6 years. The interestA Rs. I00/- tbce value bond with a coupon rate of 12% pa matures after 6 years. The i

payment is semiannual. Compute the intrinsic value of the bond, if the required rate is 160/,

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(07 Marks)c. Consider followine informat three mutual funds and mark10n on tnree murual runds and market.

Particulars Mean return Std deviation (o/o) BetaFund A t2 18 1.1

Fund B 10 15 0.9Fund C 13 20 t.2Market 11 t7 1.0Risk free rate 6%

Rank the funds according to Sharpe's measure, Treynor's measure and Jensons measure.

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I 2 M BA FM322 I ILD'4iBAB 13 3 2

a. What is portfolio revision? (03 Marks)b. What are the three forms of market efficiency? How are they tested? (07 Marks)c. An investor is considering the purchase of a bond currently priced at Rs 878.50. The band

has a life of 4 years with a face value of Rs. 1000. The coupon rate is 8% pa paid ann;4fu.k\The required rate of return is 10%pa I + "*

i) Advice the investor *.{ *;+ -

ir) Calculate the YTM of the bond ** **'qi

iil) Calculate the realizedYTM if the re-investment rate is l5Yo pa. 4# iro rrlartrs;

a. The beta(F) of a stock is -1.8. What does this mean? ;\P (04 Marks)b. A prefer.r.. share is selling at Rs 44/share, and pays a divider*ffii . a.a/share. If the

required rate is l2%pa., what is the value ofthe preference sharg* )W (04Marks)c. The current Nifty value is 7000. This is expected to reach 8mffi six months. What is the

practical implication of these values to an investor who wapgfo{rse nifty for investment?f\--l (04 Marks)

d. A bank provides an interest of Rs 1000 on an investnlqqt"bdR.s. 5000 made for 3 years. Whatis the implied annual compound rate? {W (04 Marks)

e. The current market value of investment under a m4t4lal fund is Rs 600 million. The companyreceivables are Rs. 100 million and payable RbF{ 50 million. What is the NAV of the fundif there are 250 million units in the fund? *\)" (04 Marks)

CASE STUDY ' ..-.# I-*fitrtlqu.'tq{frsi$'

,^JlC stock price (Rs.) : 597 s82 559 5s4 545Determine the value of stockCalculate the value of and establish CRL (characteristic regression line)

c. If the market return is"[.ff2 pa what would be the stock returnd. What is the overqlffffi of the stock in term of standard deviation assuming equal probability

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